Short-term contracts give mid-cap IT cos new lease of life

With the duration of outsourcing deals getting shorter, deals worth nearly USD 85 billion are up for renegotiations this year, reports CNBC-TV18’s Shreya Roy.

Midcap IT players may get a new lease of life. With the duration of outsourcing deals getting shorter, deals worth nearly USD 85 billion are up for renegotiations this year, reports CNBC-TV18’s Shreya Roy.

Over the last few years, uncertain times have forced IT companies to go in for more short-term contracts. For mid-cap IT companies, this may have been a blessing in disguise.

Data from outsourcing advisory firm TPI says that around 700 contracts will be up for renegotiations this fiscal year, compared to 530 last year.

“There is a significant reduction in the tenure of contracts as they were originally signed. Compared to 10 years ago, when 500 of these were being done, there are 1000 a year. The tenure has gone down to five years instead of seven, so a lot of deals are naturally coming back to the market as renewals. In itself, this is a very large opportunity,” said Siddharth Pai, partner and MD at TPI India.

For many IT players, this may be just what the doctor ordered. After all, renewals account for almost 65% of the outsourcing market. Advisory firm Everest estimates that by October 2013, deals worth nearly USD 85 billion will be up for renewal.

These include a contract between HP and Bank of America, a mega deal from Shell group which is currently with AT&T, HP, and T-Systems, a blue cross blue shield deal with Dell and Manu Life's deal with IBM.

Many of these contracts are expected to be broken up into smaller chunks, as outsourcers are looking increasingly towards multi-sourcing. Analysts say this could work in the favour of the smaller players, especially those like Mindtree and Hexaware, which have been focusing on developing niche capabilities to help differentiate from larger players.

 

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Business Focused Analytics – The Starting Point

Having been a Business Intelligence practitioner for the last 13 years, there has never been a more exciting time to practice this art, as organizations increasingly realize that a well implemented BI & Analytics system can provide great competitive advantage for them. This leads us to the question of – ‘What is a well implemented BI system?’ Let us follow the Q&A below.

Q: What is a well implemented BI system?

A: A well implemented BI system is one that is completely business focused.

Q: Well, that doesn’t make it any easier. How can we have BI that is completely business focused?

A: BI & Analytics becomes completely business focused when they have ‘business decisions’ as the cornerstone of their implementation. The starting point to build / re-engineer a BI system is to identify the business decisions taken by business stakeholders in their sphere of operations. Business decisions can be operational in nature (taken on a daily basis) and/or strategic (taken more infrequently but they tend to have a longer term impact). To reiterate, the starting point for BI is to catalog the business decisions taken by business stakeholders and collect the artifacts that are currently used to take those decisions.

Q: The starting point is fine – What are the other pieces?

A: The next step is to identify the metrics and key performance indicators that support decision making. In other words, any metric identified should be unambiguously correlated to the decision taken with the help of that metric and by whom. Next we need to identify the core datasets in the organization. Please refer to my earlier blog post titled ‘Thinking by Datasets’  on this subject.

Q: What about the operational systems in the landscape? Aren’t they important?

A: Once we have documented the relationship between Business Decisions to Metrics to Datasets, we need to focus on the transactional applications. The key focus items are:

• Inventory of all Transactional Applications
• Identify the business process catered by these applications
• Identify the datasets generated as part of each of business process
• Next step is to drill-down into individual entities that make up each of the datasets
• Once the Facts & Dimensions are identified from the entities, sketch out the classic ‘Bus Matrix’ which would form the basis for dimensional data modeling

 

Q: All this is good if we are building a BI system from scratch – How about existing BI systems?

A: For existing BI applications, the above mentioned process could be carried out as a health-check on the BI landscape. The bottomline is that every single report / dashboard / any other analytical component should have traceability into the metrics shown which should then link to the decisions taken by business users. BI & Analytics exist to help organizations take better business decisions and that defines its purpose & role in an enterprise IT landscape.

The answers mentioned above provide the high-level view of Hexaware’s approach to Business Intelligence projects. We have worked with many organizations across industries and a business focused analytical approach has provided good value for our customers.

Thanks for reading. Please do share your thoughts.

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Best Places of India

Every year, more than 3 million tourists visit the Taj Mahal in Agra, Uttar Pradesh.



The sixth century Paintings at the Ajanta Caves in Aurangabad, Maharashtra

Tourism in India is the largest service industry, with a contribution of 6.23% to the national GDP and 8.78% of the total employment in India. India witnesses more than 5.5 million annual foreign tourist arrivals^[1] and 740 million domestic tourism visits. The tourism industry in India generated about 100 US$ billion in 2008 and that is expected to increase to US$275.5 billion by 2018 at a 9.4% annual growth rate.^[2] In the year 2010, 17.9 million foreign tourists visited India. Majority of foreign tourists come from USA and UK. Maharashtra, Tamil Nadu, Delhi, Uttar Pradesh and Rajasthan are the top 5 states to receive inbound tourists.^[3] Domestic tourism in the same year was massive at 740 million. Andhra Pradesh, Uttar Pradesh, Tamil Nadu and Maharashtra received the big share of these visitors.^[4][5] Ministry of Tourism is the nodal agency to formulate national policies and programmes for the development and promotion of tourism. In the process, the Ministry consults and collaborates with other stakeholders in the sector including various Central Ministries/agencies, the State Governments/ union Territories and the representatives of the private sector. Concerted efforts are being made to promote new forms of tourism such as rural, cruise, medical and eco-tourism.^[6] The Ministry of Tourism is the nodal agency for the development and promotion of tourism in India and maintains the Incredible India campaign.
According to World Travel and Tourism Council, India will be a tourism hotspot from 2009–2018,^[7] having the highest 10-year growth potential.^[8] The Travel & Tourism Competitiveness Report 2007 ranked tourism in India 6th in terms of price competitiveness and 39th in terms of safety and security.^[9] Despite short- and medium-term setbacks, such as shortage of hotel rooms,^[10] tourism revenues are expected to surge by 42% from 2007 to 2017.^[11] India's 5,000 years of history, its length, breadth and the variety of geographic features make its tourism basket large and varied. It presents heritage and cultural tourism along with medical, business and sports tourism. India has a growing medical tourism sector. The 2010 Commonwealth Games in Delhi were expected to significantly boost tourism in India.

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