Medical transcription comes home

 
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Medical transcription comes home
HARSIMRAN SINGH
Posted online: Saturday, August 20, 2005 at 0000 hours IST
 
   
NEW DELHI, AUG 19:  It’s a daily ritual for thousands of homemakers across India. After sending husbands to work and kids to school, they download voice files and start transcribing medical illnesses of patients in the US.


Slowly, medical transcription from home is becoming a phenomenon, particularly in tier-II cities where the BPO boom hasn’t yet caught on and educated women are still not being encouraged to venture out of home.

“Almost half of our 600 home employees are women. Working from home allows them to spend more time with family,” said Mr Rajiv Shetye, VP, Spryance, a Boston-based medical transcription firm which now has 1,200 employees in India.

According to estimates, India has about 100 medical transcription companies and the big ones include Accusis, Spryance, Stheris and Heartland. About 10,000 people work in the $120 million-strong industry.

Still, there is a lot of untapped potential. The US market for market transcription is about $12 bn per annum, which is more than double the BPO exports of India. More than 700 million hospital events need to be recorded every year. According to Nasscom, about 1.6 lakh such transcriptionists will be needed in India by 2008. Earnings depend on how much time a person is able to devote. Billing is based on the number of lines transcribed.

Shift in US attitude puts India in the 'big league'

India is now the new China for high investment returns and the United States is beginning to see it as important an ally as Israel. That is the analysis by Dr George Friedman, chairman of Stratfor, the world's largest privately held intelligence company. In a recent investment report, Dr Friedman said the recent deal giving the Indians access to American nuclear technology for civilian uses, demonstrated a sea change in American thinking about India, despite India not being a signatory to the nuclear non-proliferation treaty. "This puts India in the 'big league'. Its nuclear status has been acknowledged by America and it can now receive the technology necessary for enhancing its nuclear energy potential," said Dr Kripa Sridharan, senior lecturer in political science at the National University of Singapore. Analysts say it shows that Washington is not merely trying to mollify Delhi over the question of the US re-arming Pakistan, but wants a durable strategic partnership. Its access to nuclear technology would have "palpable consequences for the pace of Indian expansion," said Mr Ashley J Trellis of the Carnegie Endowment for International Peace. And American businesses find India a useful place to be, to export and to invest in. "The US has been seeing a great potential in India — especially in the services sector," said Mumbai-based business strategist and former top banker Pradeep Saxena. "The difference now is that they are seeing it also as a base for manufacturing. That's the real story," said Mr Saxena. In 2004, US merchandise exports to India rose by 22.6 per cent over 2003, and imports by 18.4 per cent. More than 50 per cent of US Fortune 500 companies now outsource some of their information technology needs to Indian firms. Indian businesses, too, are increasingly investing in the US. The India-US economic relationship is beginning to look a little bit like the US-China one. Experts say it is in the economic area that India could be a counterweight to China. For a generation, China was where the smart money went. "It is no longer that place, except in the minds of the nostalgic and delusional. But India could well be," says Dr Friedman. With Sino-US relations deteriorating "fairly rapidly", having an economic alternative in India gives the US leverage with China on a host of issues, he says. But, foreign direct investments to India are nowhere near China's, which gets 13 times what India gets. An AT Kearney study showed that most multi-national corporations preferred China for its market size, government incentives, infrastructure and macro-economic climate. But unlike India, China's banking sector is in deep crisis. Calling it "technically insolvent", Professor Dr Yasheng Huang from the Sloan School of Management, and Professor Tarun Khanna, from the Harvard Business School, said in a joint research paper that it was "the biggest source of worry". Then there is the Indo-China border issue. "China does still intrude in India's strategic calculations very strongly," said Dr Sridharan. Recent events in Bhutan where China is trying to get it to cede some border territory area attest to this. But India is not likely to see this as a major setback in its warming Indo-China relations. Not when it is poised to gain the sort of material benefits from its US ties that could see it becoming a major world power militarily and economically. TODAY/rose

KPO

‘Knowledge Process Outsourcing to surpass BPO industry growth’

INDIA`S Business Process Outsourcing (BPO) industry will soon be edged out by the emerging Knowledge Processing Outsourcing (KPO) sector as the biggest revenue grosser, according to Kiran Karnik, President of India’s National Association of Software and Services Companies (NASSCOM).
Karnik also predicted that India’s IT exports will grow by 32 per cent to touch $22.3 billion by the end of the current fiscal.
Although he did not quantify the potential of the KPO industry, Karnik said that a lot of foreign companies are looking to India for setting up research and development services. China and East European nations are the major states which are well-poised to give a tough fight to India in this sector, he observed.
Karnik said there is a need for quality talent, for which NASSCOM has initiated an industry-academia programme to have a re-look at the education curricula and faculty training.
Though it is the government`s job to bring about positive changes in the education sector, he said NASSCOM, too, will play a pro-active role in this regard.
On other initiatives of NASSCOM, Karnik said that there is a move to set up a national registry of employees in the BPO sector. The data will be validated by a third party.

SOFTWARE DEVELOPMENT Silicon Subcontinent

SOFTWARE DEVELOPMENT Silicon Subcontinent

The next hot enterprise software application may come from India, not Silicon Valley. Although most CIOs still think of India as an offshore outsourcing destination, the subcontinent is becoming an IT business incubator, thanks to commercial software companies that rely on internal development teams in cities such as Delhi, Mumbai, Bangalore and Hyderabad. Venture capitalists, such as Deepak Kamra of Canaan Partners, are tapping the talents of engineers educated at the Indian Institutes of Technology—the same talent pool that produced the many immigrants who, in the 1990s, led startups in the United States. Only back in India, they cost less. "More innovation in more places at a lower cost means a lower cost for software and better quality," says Kamra. The result, he adds, is a better deal for customers. Skelta Software, a 65-person company based in Bangalore, counts Siemens Westinghouse Power among the customers of its workflow software. "We would never have been able to start the company without using the cost and talent advantage of India," says CEO Sanjay Shah. CRM vendor Talisma is headquartered in Bellevue, Wash. But its 150 India-based employees do product development, quality assurance, product management and marketing. Jim O'Farrell, Talisma's vice president, says his costs are five times lower than if these functions were located stateside. Given lower labor costs, nimble startups in India can beat established vendors to market by hiring larger development teams than they could otherwise afford. "We bring products to the market about twice as fast," confirms Anil Gupta, vice president of marketing with compliance software vendor MetricStream. Sixty of the company's 100 employees work from Bangalore.

Innovation Ships Out

U.S. computer makers such as Dell, Motorola and HP are outsourcing not just the manufacture but the design of new products to offshore companies. Could this be the end of America's innovative edge in electronics?

Buy a laptop anywhere in the world and there is a one-in-four chance that T.J. Fang will process the order. You'll just never know it. Fang's secret is cloaked in IT, in servers that consolidate purchase orders from name-brand American companies such as Hewlett-Packard, Apple and IBM. The order trail leads to Fang's ERP system at Quanta Computer in Taipei. Fang, assistant vice president and head of IT operations at Quanta, feeds those orders to his Taiwanese and Chinese suppliers and factories, and within five days, Quanta "drop ships" to the customer a laptop that the buyer himself configured on the brand-name website. No one at the company selling the laptop ever lays a finger on it. Indeed, investment bank Morgan Stanley estimates that the manufacturing for 89 percent of American brand-name laptops are outsourced today. What's more, many of these famous computer brand names don't even design their machines anymore. New models are chosen from a shelf of fully functioning prototypes offered up by a handful of Taiwanese companies. Quanta's ability to design and build new laptops from scratch has helped it gain a 25 percent share of all laptops sold in the United States. "In the past 10 years, [companies such as Quanta] have gone from undercover stealth to a massive global business," says Adam Pick, senior analyst for iSuppli, a market intelligence consultancy. Outsourcing has reached the highest level of the manufacturing supply chain: R&D. By outsourcing R&D offshore, original equipment manufacturers (OEMs) can freeze a portion of their R&D budgets while growing their product offerings. Even R&D powerhouses such as IBM, HP and Motorola have frozen—or even reduced—their R&D budgets since 2000. "[Outsourcing] is a tremendous opportunity for cost savings on R&D," says Jack Faber, vice president of operations, enterprise systems for HP. But there may be a downside to all this R&D reshuffling. Some economists say the outsourcing of manufacturing—and now design—is the leading edge of a longer-term trend toward reduced innovation and competitiveness among U.S. companies. As OEMs turn over the development of new products to outsourcers, it could have a withering effect on these companies' ability to create the next breakthrough, especially as many freeze R&D spending. Spending on R&D by U.S. companies declined more in 2002 (3.9 percent) than it has since the National Science Foundation began tracking the number in 1953. Though the technology slump that began in 2000 may play a big role in these declining R&D numbers, there is a larger, more disturbing trend at work, argues Gregory Tassey, senior economist at the National Institute of Standards and Technology (NIST). For the past 12 years, the proportion of R&D money going toward new innovation—the "R" in R&D—has also been going down, displaced by incremental product development (next year's laptop, for example). Product development—the "D" in R&D—swallows more resources than the "R" work, and it does not create new opportunities for revenue; it merely extends current product categories.
For CIOs in electronics and other industries, the shift toward global manufacturing and R&D means big changes in the supply chain. Meanwhile, government spending on R&D has also been dropping over the same period. R&D spending in the United States now lags behind many countries, including Japan and Germany. The changing mix of R&D spending in the United States could have a major impact on U.S. competitiveness over the long term, Tassey says. Governments around the world are pumping money into private-sector R&D to boost innovation. In contrast, U.S. government spending on R&D is almost all focused on specific programs—such as space, defense and health—rather than free-form research. "We have the view in this country that private industry is capable of making the necessary investments in R&D to keep the U.S. competitive," says Tassey. "If that's the case, then every other country in the world is wrong."
If you thought your Dell was designed in the U.S., think again
Here is a list of companies that outsource most, if not all, of the design and manufacturing of some of their products. Read MoreThe U.S. computer industry may be a bellwether for other industries that have not yet begun to send product development work to outsourcers. As U.S. companies increasingly shift their R&D focus from new breakthroughs to product refreshes, they will be tempted to move that work offshore, where well-trained and well-educated engineers are available at a fraction of the cost of their U.S. counterparts. The trend is eerily similar to the offshore outsourcing of computer programming. Unemployment rates among both R&D engineers and IT programmers in the United States continue to trend downward, despite the recent economic rebound. As more valuable components of the manufacturing value chain progressively move offshore, will the ultimate value creators—advanced research and innovation—eventually move offshore too? How long can U.S. companies continue to innovate when they no longer manufacture or update products? What will be left behind? Marketing? For CIOs in electronics and other industries, the shift toward global manufacturing and R&D means big changes in the supply chain. Companies that outsource R&D or split it among different locations or suppliers will need IT linkages to enable better collaboration among engineers. And as companies outsource other pieces of the supply chain (customer service, shipping, and warranty and repair, for example), CIOs will need to replace direct oversight of processes with automated monitoring and reporting to ensure that suppliers are meeting quality metrics and shipping on time. Of course, if outsourcing is truly complete—from design right on down to shipping, service and repair—there is a distinct possibility that companies could drastically cut back on internal IT as well, severely reducing the CIO's span of influence. Indeed, as OEMs turn more of their supply chain over to offshore electronic manufacturing services (EMS) companies, they will rely more and more upon the internal IT groups of these organizations to monitor their supply chain for them. "OEM has become a misnomer unless you change the M to marketing," says Kristian Talvitie, director of strategic marketing and communications for Plexus, a global EMS company based in the United States. Moving Up the Food Chain In the past 15 years, EMS companies here and abroad have moved steadily up the food chain in large part because the value of the work to which they laid claim has been driven down by price pressure and global competition. Indeed, the work that launched the EMS industry in the '80s, stuffing components such as microprocessors onto computer circuit boards for big-name computer manufacturers, has ceased to be profitable, industry insiders say. "Placing components on boards is commoditized. You have to offer a whole variety of services to win a new customer today," says John McManus, managing director and senior analyst for Needham & Co., an investment banking and research company. To survive, EMS companies have had to continually take on higher-order, more complex pieces of the electronics supply chain to keep their hollow-cheeked profit margins (overall industry average is 2 percent to 5 percent) from disappearing altogether. Design work typically has higher gross profit margins, between 8 percent and 11 percent, according to iSuppli's Pick. This has led to the growth of upstart companies such as Quanta that specialize in total design, manufacturing and shipping solutions for customers. Traditional EMS companies, accustomed to focusing exclusively on the manufacturing portion of the supply chain, are now expanding their design services to compete. "[EMS companies] want to get more of the value added at the research end," Tassey says. "Innovation is where you capture the big value, the new markets." Quanta, unlike its larger EMS competitors, does not swallow customers' old factories and try to squeeze profits out of them. Quanta emphasizes design and logistics in Taiwan and assembles a network of manufacturers, mostly in China, to build its products. And Fang can use lightweight IT connections to hook his supply chain together and keep customers apprised of where their products are in the process. Fang has created an Internet portal for his network of 700 small suppliers. Each morning, suppliers download their purchase orders from Quanta's website and print out bar codes that they slap on the side of the box so that Quanta can quickly direct the materials where they need to go at its Taipei logistics center. IT Makes Outsourcing Easy IT has accelerated the outsourcing trend in electronics because it allows OEMs to monitor the processes they give up, such as manufacturing and design. IT can't replace a good assembly line foreman or a chief engineer who watches over things, but in many cases, monitoring the process is enough. For example, OEMs don't need to test each PC made by an EMS before it gets shipped if they have set up a testing process at the factory that is monitored by IT. The OEM just has to verify, via an IT-based reporting system, that PCs that didn't pass the agreed-upon test were not shipped. Monitoring reduces the number of people from the OEM needed onsite at the EMS's factory and virtually eliminates the need for the OEM to physically take possession of the products.
As U.S. companies increasingly shift their R&D focus from new breakthroughs to product refreshes, they will be tempted to move that work offshore. For big U.S. companies with diverse product lines such as HP, it's impossible to get everything they need from a single EMS company. Nor would these companies want to, for competitive, intellectual property and security reasons. But HP, for one, does try to limit the number of EMS companies it deals with, partly to shave costs, and also because the increased IT demands of monitoring the EMS's processes can be quite expensive for highly configurable products such as high-end servers. "If we want to create a build-to-order process for customers with an EMS, there is a lot more intimacy required in the information we exchange with the EMS," says Faber. More product options means more monitoring of the EMS company's processes. "The information pipe will be a lot bigger and must be much more responsive to changes than when we're dealing with a commodity product," he says. If an EMS can take over the entire product process, from design to manufacturing to shipping to customers, and OEMs can verify through relatively inexpensive IT controls that the EMS is performing all these processes up to snuff, it becomes a much more enticing package for OEMs. Splitting up linked processes such as design, manufacturing and shipping is hard; it costs more and requires more oversight from the OEM. That's why design is becoming a deal maker (or breaker) for new outsourcing business. "All of the [EMS] companies realize they have to get involved in the design effort at the early stage because that's how the business is won today," says Needham's McManus. With the relentless margin pressure that exists in the computer industry today, OEMs are quickly coming to the view that there is no point in devoting a great deal of R&D resources to mature product categories that change as rapidly as PCs, laptops and cell phones. R&D engineers are the most expensive nonmanagement employees these companies have. "The OEMs are building entirely new product families every few years. So you either keep building R&D capacity to do that, or you outsource it," says Chris Smith, president and CEO of RiverOne, a maker of supply chain management software. "It's driven by the pace of change in the industry." Indeed, Quanta is not designing anything all that original. The company is unlikely (at least for now) to invent the next revolutionary new product category. But it is perfectly capable of designing and manufacturing the next version of a PC, laptop or, in a move up the value chain, storage server on its own. "These companies started with circuit boards and worked their way up to design over the years. They've built up a lot of trust with the OEMs," says iSuppli's Pick. These companies aren't simply providing cheap labor, either. Pick says many have instituted quality programs such as Six Sigma that rival Western producers. Factory capacity utilization among EMS companies averages 85 percent to 90 percent in the Far East, versus 65 percent worldwide. Innovation Not Far Behind Quanta's Fang is careful to point out that his company has no intention of developing its own brands and selling against its customers. But other offshore EMS's have already broken that taboo. For example, BenQ, another Taiwanese EMS, sells its own brands of cell phones and computer accessories in the Far East and the United States. Quanta could be forced to do the same in the not-too-distant future. The incredible growth of electronics outsourcing has masked a fundamental weakness in the business model: Nobody has yet learned how to make much profit doing it. Even design margins have begun to erode recently, as EMS companies flock to the model and OEMs push for lower prices. To avoid a race to the bottom, the industry is going to have to find a way to earn better returns. "I don't think there's anything stopping the outsourcing push," says Needham's McManus. "The issue is: Can you be a successful corporation with returns on capital that are no better than 15 percent?" Indeed, during a recent conference call, Jure Sola, chief executive officer of Sanmina-SCI, a large EMS company, told financial analysts, "There's no way in the world this industry can exist on the margins that we are delivering today." Innovation is the route out of low-margin manufacturing. IBM, Xerox, AT&T and HP built their R&D capabilities with cash from unique products that commanded high margins—or, in the case of AT&T, from an outright monopoly. But those companies have a harder time justifying investments in research today. "It's difficult to make an ROI argument for creating fundamentally new scientific knowledge," says Mark Bernstein, president and center director of PARC, the former Xerox think tank that was spun out into an independent subsidiary in 2002. "Faster product cycles and the increased focus on efficiency and productivity have made it harder for companies to have a long-term vision." The loss of manufacturing and design could make it difficult for the traditional R&D powerhouses to innovate in the future. "Real breakthrough product development usually requires manufacturing and research to be located together," says NIST's Tassey. Supercomputers and high-tech weapons, for example, required close collaboration between engineers and manufacturers. But PARC's Bernstein says R&D must become more global by necessity. "The breadth of research required to master a market these days is pretty significant," he says. "You're going to see a lot more partnering" around the globe to do research. Besides outsourcing manufacturing and design, many U.S. companies have opened their own dedicated R&D facilities in low-cost countries such as India and China. Innovation still occurs under the banner of a U.S. corporation, but it happens elsewhere, employing lower-cost engineers. Though U.S. corporations will continue to innovate under this model, the United States and its pool of engineers will become lesser engines of that innovation. To some observers, this may sound a death knell for the United States' current lead in technology innovation, but HP's Faber isn't overly worried. "I hate to sound like a Republican," he says, "but when I first came here 20 years ago, we had our own factories for sheet metal and screws and everyone thought we had to keep them. As we outsource, we just keep focusing on higher value-added work." HP's newer 64-bit servers are examples of products that are largely conceived and designed in the United States, he says. It's clear, however, that this is a sensitive issue for the traditional R&D powerhouses. All but one (HP) declined to comment on the growing trend in outsourcing the "D" in R&D. At the same time, the EMS companies we spoke to denied they have any plans to expand into the "R" part of R&D or offer their own products for sale. Given their dependency on brand-name companies for business, it's unlikely that we'll see a "Quanta Labs" anytime soon. But as the EMS companies take on more and more design work and build up their engineering groups, there is little doubt that they will eventually have the capability to come up with their own ideas. Quanta, for instance, has 1,500 design engineers today. The plan is to expand that number to 7,000 in the next couple of years. Fang thinks other EMS companies will follow suit. "The profits in manufacturing aren't large," he says. "So moving into design is an obvious choice. It's a natural evolution." Even if Quanta has no plans to sell its own products, surely one of those 7,000 engineers will have a good idea up his or her sleeve.

Domestic market lures BPO Cos

NEW DELHI: A number of players are now gearing up to tap the potential of the emerging BPO market in India.
The National Association of Software and Service Companies (NASSCOM) has predicting a growth of 40 per cent year-on-year in the domestic BPO market. According to NASSCOM, domestic market revenues grew 24 per cent in the FY 04-05. The market's untapped but significant potential, rapid adoption and small base is likely to result in high growth rate.
NASSCOM president Kiran Karnik said, “The rapid growth of the Indian ITeS sector has been one of the biggest success stories of the Indian economy. Growth in domestic outsourcing is surely going to provide good business and excellent employment opportunities, particularly in Tier II cities, thereby denting the digital divide.”
Bharti Tele Ventures Ltd has already signed a Rs 1,000 crore deal, the largest in the domestic market, to outsource its call center operations. The deal is split among four players, viz., IBM Daksh, Teletech, Hinduja TMT (HTMT) and MphasiS.
MphasiS believes that the NASSCOM numbers are realistic for top Indian BPO companies.
MphasiS president Bhaskar Menon said, “We plan to have 1,500 seats by March 2006 to cater to the domestic market. We currently have three domestic BPO clients in the banking, telecom and airlines space.” The company has over 9,500 professionals spread across 23 offices and nine software development and five BPO centers worldwide.
HTMT also plans to increase its focus on the domestic market. The company expects to up its domestic BPO headcount to around 1,700 professionals by the end of the next quarter.
Partha Sarkar, HTMT ITeS COO, said, “For the Airtel deal, we will be hiring around 1,000 professionals in the next couple of months in our Hyderabad and Chennai facilities. The company is planning to open two more centers, one each in Kolkata and Delhi. We expect to employ around 1,000 professionals in the Kolkata facility by March 2007.”
IBM Daksh has stepped into the domestic BPO market with the Airtel deal. The company plans to target verticals such as telecom, BFSI and travel and hospitality for growth in this sector.

India may become software testing hub

Software bugs or errors cost the US economy an estimated $ 59.5 billion annually, which is equivalent to 0.6 per cent of its gross domestic product. This loss is borne by users and developers of software. At least a third of this cost can be saved through better quality and timely software testing.
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In India, the market for IT-related services is estimated to reach the $20-billion mark next year. Reported software testing revenues form 1-2 per cent of this figure. Ideally, 20-30 per cent of the software development life-cycle (SDLC) should be dedicated to software testing. In today's business, this will empower companies with huge cost advantages, where cost-control and value-creation are paramount. Independent software testing players spotted this huge potential almost six years ago.
Sensing the opportunities in this emerging space, most of the top ten IT companies in India created independent testing practices in-house. Leading IT companies now position testing as a standalone service and often find it an easier route to gain entry into new accounts for offshoring services. Revenues from testing services are poised to grow exponentially over the next five years. The following trends are fuelling this growth:
Worldwide, CIOs (chief information officers) are under pressure to increase the ROI (return-on-investment) on their IT investments.
At the organisational level, most institutions in the developed world have realised that their survival depend on how effectively they can cut operational costs while improving the service standards to their constituents. IT outsourcing, and subsequently, offshoring have been the answer to these challenges.
One out of every four companies is now outsourcing an IT function. In 2003, Europe witnessed an 87 per cent jump in outsourcing. Independent testing from an early stage in the SDLC is seen as an effective way to mitigate the risks of outsourcing.
Project time-lines and budgets are crashing. By the time projects come to the testing stage, over 50 per cent would be staring at unreasonable deadlines to go live. Users and providers of technology recognise that independent testing companies can bring down testing costs and time-lines significantly. Outsourcing software testing can cut costs significantly, improve quality and lower risks.
Vertical-specific legal and regulatory frameworks are becoming more stringent. In terms of technology absorption, the leading verticals have been banking, financial services and health-care. These verticals have witnessed the tightening of regulatory norms, which has meant significant investment in technology.
HIPAA (for health care), BASEL II, SOX, anti-money laundering (on the banking and financial services) have been on top of the list. Even in the domestic market, the Reserve Bank of India has led the charge with implementation of an RTGS (Real Time Gross Settlement) system, which has set the pace for banks to increase significantly their technology deployment.
Technology sourcing strategies are more complex. Multiple vendors working on engagements are common because business requirements are more complex today.
It is common to find banks with more than a hundred bought out applications, which are all integrated and drawing upon one another. With software getting more integrated within and outside the organisation, it is increasing the dependence on the same for all business decisions.
Defects could result in both financial and non-financial (image, response time and so on) setbacks. In industries such as banking, where money is business and managing risks is critical, the effect of software defects can be disastrous. Independent testing is increasingly giving that additional assurance to clients.
Increasingly users of technology are non-technical and, therefore, their tolerance for poor quality is low. The quality of application going into production has become a key determinant of the evaluation of CIOs. The questions that need immediate answers are: If the new solution is improving the life of the business user? Is the solution making him more productive in delivering his role? Is it making the customer's life easier?
With these developments, testing is increasingly being seen as a specialised service. The presence of sound testing service providers in offshore locations, such as India, will help global corporates mitigate risks associated with offshoring. Today, testing is attracting better quality talent.
Five years ago, testing was seen as a poor cousin to development. Today, both billing rates and compensation levels of testing professionals are comparable, if not better, than programming professional.
Testing requires a thorough knowledge of the business process in the segment and of the testing process and methodology. Even a moderately skilled resource that fits this description is scarce. Offshore destinations, such as India, have a large pool of human resource that can be turned into high quality testing professionals.
Lack of training academies that focus on testing is a serious issue today. Twenty years ago there were training institutes for computing languages. Knowledge of the SDLC and programming languages have now found their way into school and college curricula.
Testing is yet to get the attention of academic institutions. Given the promising rate of growth in testing that took over the last few years, the next five years will see more specialised programmes around software testing which would further strengthen the position of software testing as a sound career option.
A sound independent software testing industry will, in turn, give additional assurance to clients to outsource from and offshore to India.

Legal industry sees more work sent offshore

Legal industry sees more work sent offshore

Lawyers and legal assistants across the world are doing routine legal work that once was taken care of in the U.S.
"There are no more boundaries," said John Tredennick, chief executive and founder of Denver-based CaseShare Systems. "That doesn't mean walking into the courtroom, but beyond that there isn't anything that can't be done with the Internet."
Among other things, Tredennick's company manages electronic documents for the legal industry and partners with others to outsource work formerly done in America by paralegals and junior attorneys.
Legal firms sending their work to India, New Zealand, Australia, South Korea and other countries are motivated by the same drive for lower costs that has sent manufacturing and customer service jobs out of the country. Foreign workers can perform the tasks for up to 80 percent less than their American counterparts, Tredennick said.
The trend is relatively new and may have limited impact on American jobs. U.S. regulations bar lawyers who aren't licensed in this country from giving legal advice on American law.
But its impact on the legal industry is growing. So far this year, 20,000 legal jobs have been shipped overseas, and market research firm Forrester Research predicts that number will grow to 79,988 by 2015.
About 1 million trained attorneys are now registered in the U.S., according to the American Bar Association. The association doesn't track paralegal and support-staff positions.
Chicago-based Mindcrest Inc., a 3-year-old firm with 26 lawyers in Bombay, India, does legal work for American companies and law firms. By the end of the year, the company expects to add another 25 jobs, said Ganesh Natarajan, Mindcrest chief executive.
Two of the company's clients are large Denver corporations, Natarajan said, declining to identify them.
Mindcrest's Indian employees don't practice law. Instead they perform document searches, draft research memos and survey the laws of different jurisdictions for American companies.
Corporate counsels who are seeking
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to cut costs are driving the trend, he said. "Law firms are their vendors, and they are saying, 'Is there anything you can do to streamline yourselves and assure us better value?"'
Microsoft is among the companies that have moved legal work offshore. It does some patent work in India. Indian attorneys also draft outsourcing agreements and confidentiality contracts for General Electric.
Patent lawyer Carl Oppedahl of Dillon said an Indian company approached him about drafting the drawings his firm must submit to the U.S. Patent and Trademark Office.
"It probably would have been cheaper than doing the drafting here," Oppedahl said. He didn't follow up on the inquiry because people who hire patent lawyers already are concerned that their idea will be stolen. "Think about it from the inventors' point of view. They are concerned that if they disclose their idea to somebody, the company could run off with it."
Oppedahl said he is aware that some large companies are sending patent work to foreign shores, and he sees nothing wrong with doing legal work overseas as long as the client has agreed to it.
"It's not an easy decision to make," he said. "Here in the U.S., if someone was to violate the confidentiality of a client they would risk being debarred. In foreign countries, that might be different. That is a concern."
Staff writer Tom McGhee can be reached at 303-820-1671 or tmcghee@denverpost.com.

Small-time call centers head offshore

By Eric Lai
East Bay Business Times
Updated: 8:00 p.m. ET July 31, 2005
Five9 hopes its strategy to win new customers for its Internet call center services proves to be a clever way to develop new business, rather than a draining distraction for the young, venture-backed startup.
The Pleasanton software firm announced July 25 that it is creating call center training centers in the Philippines and India. The centers are basically incubators for budding owners and managers of call centers, who pay the equivalent of $40 a month to get a real-life crash course on all aspects of running a call center.
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Up until now, the U.S. companies that have offshored their call centers - from technical help desks and customer service hotlines to telemarketers - have tended to be Fortune 1000 firms that set up huge call centers with thousands of operators.
But the low entry-level cost of call center technology such as that offered by Five9, coupled with the huge savings for companies that shift even small call centers overseas, is creating a new market.
"There is both money and talent in those countries that want to get into the call center business," said Five9 CEO, Brian Silverman. But the failure rate for call center startups is high: more than half go out of business within a year, according to Silverman.
That's no good for Five9. Like Salesforce.com, Five9's software is delivered completely through the Web and is aimed at smaller firms, typically with call centers of 200 operators or less.
Using Five9, even very small companies can outsource or offshore their call centers.
Take SF Signature Limousine and Sedan Service. The four-employee South San Francisco company now uses an operator based in the Philippines to handle dispatches, phone orders and even do some tele-sales, said Valerie Tse, one of Signature's owners.
"It definitely makes sense for us economically," said Tse, who figures the cost of using an offshore operator is about one-third that of hiring someone locally.
In addition to training centers, Five9 is working with universities in those countries to create a one-year training call center training program with matching scholarships. Five9 is also creating an Internet marketplace that will bring small companies in the United States together with call center providers overseas.
It's all part of a long-term strategy that Silverman says Five9 can - and must - afford. Two-thirds of Five9's 400 customer companies run call centers based in the United States or Canada. But Five9 is expecting sales to quickly ramp up in markets such as the Caribbean, the Philippines and India, where English skills are strong and salaries of call center operators are low.
Founded in 2001, Five9 has raised $17 million in two rounds of venture capital financing. With 4,000 users for its software, which lists at $300 per user per month but is discounted in poorer countries, Five9's monthly revenue is approaching $1 million. That revenue is growing 15 percent to 20 percent month-over-month, said Silverman.
Five9 expects to turn its first profit by year's end, and start trading publicly sometime next year.
© 2005 East Bay Business Times