[biztech-discussion] New: NWU Training Courses

  • From: "Andreas Ramos" <andreas@xxxxxxxxxxx>
  • To: "BizTech" <biztech-discussion@xxxxxxxxxxxxx>
  • Date: Tue, 6 Jul 2004 16:03:21 -0700

At our next meeting, we're going to learn how to wear a sari (for the women) 
and tie a
turban (for the men).
Read the following. The high-level jobs are going away. The jobs left in the 
USA will be
low-level support or secondary jobs (marketing, distribution, sales, building 
custodial, etc.)

-- andreas


400% Jump in Offshoring, especially to India
Amy Wu, Chronicle Staff Writer,
Tuesday, July 6, 2004 (SF Chronicle)

Global financial institutions are jumping on the offshoring bandwagon at a 
blistering pace,
a study released last week found. From 2003 to 2004, financial institutions 
from North
America and Europe increased offshore jobs from an average of 300 to 1,500 
each, a stunning
400 percent jump, according to the survey by Deloitte Research, a unit of the 
accounting and
consulting firm Deloitte & Touche.

During the same period, the number of financial institutions that moved 
functions to other
countries with cheaper labor rose 38 percent, Deloitte found. "The growth is 
there is no question it's there," said Peter Lowes, the New York head of 
Consulting's outsourcing advisory practice, who helped spearhead the project.  
"It's very
real. This has been building up very slowly over 15 years. This is not a flash 
in the pan,"
he added.

In its second annual study of financial services offshoring, Deloitte surveyed 
institutions, including banks, mutual funds and insurance  companies, in seven 
between December 2003 and March 2004. The survey included 13 of the world's 25 
financial institutions, ranked by stock market value, Deloitte said. It 
declined to identify
survey participants.

The larger the company, the more likely it was to operate offshore, Deloitte 
found. Based on
the survey, Deloitte estimated that some 80 percent of the world's largest 
institutions -- those with stock market capitalizations greater than $10 
billion -- already
have offshore operations. Among smaller financial companies, about half operate 
while the other half don't do so yet. "The gap is growing. The big ones are 
changing ahead
and the small ones don't have scale," Deloitte's researchers said.

India has emerged as the location of choice for financial institutions, 
Deloitte found.
About 80 percent of financial services offshoring is taking place there, 
according to the
study.  Lowes attributed last year's rapid growth in offshoring to the 
maturation of
telecommunications technology, which has eased transmission of digital data. 
That has
allowed data-intensive functions as varied as customer service and software 
development to
move overseas. In addition, Lowes said, emerging countries are wooing big 
companies with
perks such as tax-free incentives.  Another reason for the leap is that 
companies that
started offshoring more than a decade ago on a small scale are now building out 
operations.  "The pioneers had been out there for 10 or 11 years, had taken all 
of the
risks, and they were building and building, and all of a sudden things fell 
into place,"
Lowes said.

Although the report cautions that investing in offshoring isn't cheap and that 
the rewards
might not be immediate, it notes that companies stand to achieve big savings.  
The report
forecasts that by 2010, the world's 100 largest financial institutions will 
move $400
billion of their cost base offshore, saving an average of just under $1.5 
billion annually
each. The survey also forecasts that by 2010 more than 20 percent of the 
industry's global cost base will have gone offshore.

By the numbers

   Financial institutions are moving jobs offshore at a rapid pace.

   -- From 2003 to 2004, major financial institutions increased offshore jobs 
by 400

   -- The number of financial institutions moving operations to countries with 
cheaper labor
rose 38 percent during the same period.

   -- By 2010, the world's 100 largest financial institutions will have moved 
about $400
billion of their cost base offshore.

   Source: Deloitte Research

   E-mail Amy Wu at awu@xxxxxxxxxxxxxxxx

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