Trends in software outsourcing this year, 2016

We have seen software outsourcing companies welcoming increased standardization and cloud computing

We have seen software outsourcing companies welcoming increased standardization and cloud computing options of all flavors, use their influence to renegotiate or rebid their deals, and settle into a best-of-breed approach to offshore outsourcing.

 Let’s look at some trends in outsourcing industry in this year:

Security becomes the epicenter

Security is on the mind from the boardroom to the break room, and it will impact outsourcing strategy in 2016. Certainly, security risk is poised to increase as telematics and the IoT becomes more prevalent in consumer and commercial products. Growing numbers of threat actors will use more and more creative ways to exploit weaknesses, often with devastating effect. Regulators will exact gradually large fines for poor security. Service providers have often been the weakest link in a company’s security and will need to find improved ways to address that concern.

The threat profile changes every day and with every additional protection comes a new weakness, not to mention it is becoming harder and harder to tie products together to deliver a robust security solution. This year, we expect to see the upsurge of the Chief Security Officer and more companies opting for specialized security vendors with Security-as-a-Service capabilities that can protect data no matter where it exists.

Offshore captives strike back

Companies will influence the experience they have gained in process maturity as a consequence of working with outsourced offshore teams and set up their own shops, predicts the objective of this tactic will be cost cutting by taking away the provider’s margin, as well as increase flexibility by removing contractual constraints. Rather than insourcing as a knee-jerk reaction to a bad outsourcing relationship and repeating previous mistakes, clients will benefit from lessons learnt and be smarter about what and how they exile.

Production workloads – hit the cloud

There’s no denial that Amazon’s first mover advantage with the public cloud. And IT shops who reached for the cloud first did so with trivial systems. But in this year, we’ll see more production workloads move to the cloud—and not just AWS. No CIO (Chief Information Officer) wants to tie up with just one cloud provider. IT pros recognize that the future of their data centers will symbolize many platforms, so we’ll start to see more CIOs experiment with other key public cloud options, such as Microsoft Azure and Google Cloud Platform.

The potential to move outsourcing from the ‘lift and shift’ of trivial processes to something more substantial is entirely doable in the cloud. The as-a-service outsourcing model makes it likely to combine infrastructure, software, and business process to create a platform that is much more segmental, scalable and intellectual. This platform can handle higher-level processes, creating results that increase revenues, improve profit margins, enhance customer service, and move the business ahead instead of running in place.

VMOs go conventional

Multi-sourcing has amplified the vendor management workload. As clients look for ways to address the challenges of managing ever more complex multi-vendor service delivery models, the VMO will establish itself as a way to provide a high-level, organization-wide view while at the same time managing day-to-day operational details and multiple touch points between different providers in the service delivery chain.

Integration challenges the flow

Customers adopting a great number of evolving digital technologies will face an ever-larger integration challenge. Many of the most powerful cloud technologies will require integration struggles comparable to those required to install ERP systems. As most software outsourcing companies in India do not have employees who are able to manage multiple emerging technology platforms, they’ll have to outsource service integration, change management and incident management. So we expect increasing partnerships among providers.

The service providers universe develops

Customers will buy from a growing list of technology providers. Customers will continue to turn to ITO, BPO, KPO, software outsourcing companies in India and cloud service providers who have radiated a digital trail for assisting in becoming digital businesses. They will source services from an ever-expanding list of evolving and digital technology providers. We’ll see more product-driven managed services as more product-oriented vendors, such as Cisco and others, move ahead than just selling their products to also delivering services around their products. We are already seeing this on a small scale, but expect it to rise this year as very large clients are growing their managed services capabilities.

Automation will reinvent relationships

Having shattered the opportunities to move work to lower-cost people, IT Outsourcing companies and BPO companies put their emphasis now on moving it to machines. Buyers with agreements designed to purchase people will need to settle their contracts to this new world. Both customers and providers will have to reconsider their deals as they integrate more RPA into IT service delivery.

Both parties will have to redefine roles and skills necessities for human jobs, as well as manage the touch points between automation functions and jobs performed by humans. This will present a substantial challenge for outsourcing relationships as agreements will need to be flexible to house these highly dynamic environments.

Agile sourcing emerges

With technology itself seeming to advance gradually, outsourcing decision making will have to speed up. Software outsourcing companies India who decide on a digital strategy will execute quickly in this year to avoid seeing a technology shift or an opponent jumping ahead. We see growing numbers of clients deploying substantial negotiating teams working on an agile basis to close smart deals quickly.

Emerging Technologies and Opportunities for Big Data Applications

Introduction Software development companies are trying to be up to date with the emerging trends for

Introduction

Software development companies are trying to be up to date with the emerging trends for Big Data. Big data has got a well-recognized place by The Government as well. Government has recognized big data by categorizing it as one of the ‘Eight Great Technologies’ which will drive the world to future growth. The (COMMUNITY, 2014) reports on the increase in data being produced and the importance of new types of computing command in order to reap the economic value of the data.

Big Data

According to (COMMUNITY, 2014), the following is a working definition of Big Data:
“Big Data refers to huge volumes of data with high level of complexity as well as the analytical methods applied to them. This requires more cutting-edge techniques and technologies in order to develop meaningful information and understandings in tangible time”.

Analytics is considered to be the inherent part of new techniques and technologies for Big Data. The scope of analytics covers three roles:

a) Descriptive analytics - to understand what is happening in the world, using visualization techniques, some modeling and regression.

b) Predictive analytics - to predict what will happen, using forecasting.

c) Prescriptive analytics - to work out what we want, using simulation, optimization, scenario testing and Multi-Criteria Decision Analysis.

Trends in Big Data Analytics

Big data technologies and practices are moving quickly. Here’s what one should know, according to (Mitchell, 2013), to stay ahead of the game :

a) Big data analytics in the cloud

This allows users to access extremely scalable computing and storage resources through the Internet. It allows companies to get server capacity as needed and expand it rapidly to the enormous scale required to process big datasets and execute complicated mathematical models. Cloud computing reduces the price of data storage because the resources are shared among many users, who pay only for the capacity they actually utilize. Companies can access this capability much more quickly, without the expense and time needed to set up their personal systems, and they do not have to purchase enough capacity to accommodate highest usage.

b) Hadoop: The new enterprise data operating system

Hadoop is by far the most popular implementation of MapReduce. MapReduce is a completely open source platform which handles Big Data. As it is flexible, it works with multiple data sources. It either aggregates multiple sources of data in order to do large scale processing, or reads data from a database in order to run processor-intensive machine learning jobs. It has several diverse applications, but one of the top usages is for large volumes of constantly changing data. Changing data may be web-based or social media data, location-based data from weather or traffic sensors, or machine-to-machine transactional data.

c) Big data lakes

Traditional database theory dictates that you design the data set before entering any data. A data lake, also known as an enterprise data lake or enterprise data hub, turns that model on its head. It offers tools for people to analyze the data, along with a high-level definition of what data exists in the lake.

d) More predictive analytics

Predictive analytics is the branch of data mining concerned with the prediction of future prospects and trends. The central element of predictive analytics is the predictor, a variable that can be measured for an individual or other unit to predict future behavior.

With big data, analysts have not only more data to work with, but also the processing power to handle great numbers of records with many attributes.

e) In-memory analytics

It works by increasing the speed, reliability and performance when querying data. Business Intelligence deployments are typically disk-based, that is the application queries data stored on physical disks. In contrast, with in-memory analytics, the queries and data exist in the server's random access memory (RAM).

The use of in-memory databases to speed up analytic processing is increasingly popular and highly valuable in the right setting. Many web application development companies are making use of In-memory analytics to attain more reliability and greater performance.

f) More, better NoSQL

Alternatives to traditional SQL-based relational databases, termed NoSQL (short for “Not Only SQL”) databases, are rapidly gaining importance as tools for use in specific kinds of analytic applications.

 According to (Wikipedia), the working definition of NoSQL is as follows:
“A NoSQL, formerly referred to as "non SQL" or "non-relational", database provides a mechanism for storage as well as retrieval of data which is modeled in means other than the tabular relations used in relational databases.”

Conclusion

While the subject of Big Data is broad and encompasses many trends and new technology developments, Software development companies in India are keeping pace with the global market. It becomes essential for organizations to cope with and also handle Big Data in a cost-effective way. The various technologies emerging for Big data applications are Hadoop, Column-oriented databases, MapReduce, Schema-less databases, or NoSQL databases to name a few.

Bibliography

COMMUNITY, E. T. (2014). EMERGING TECHNOLOGIES: BIG DATA. HM GOVERNMENT.
Mitchell, R. L. (2013, Oct 23). 8 Big trends in big data analytics. Retrieved Apr 25, 2016, from 8 Big trends in big data analytics:
http://www.computerworld.com/article/2690856/big-data/8-big-trends-in-big-data-analytics.html
Rouse, M. (2012, June). Cloud ERP. Retrieved 04 20, 2016, from
http://searchcloudapplications.techtarget.com/definition/cloud-ERP
Wikipedia. (n.d.). Retrieved from https://en.wikipedia.org/wiki/NoSQL

 

Understanding the role of ERP in Supply Chain Management

1. Introduction Enterprises rely on different types of information systems (IS) for managing day-to-

Enterprises rely on different types of information systems (IS) for managing day-to-day business and making decisions such as customer relationship management systems (CRM), enterprise resource planning (ERP) and supply chain management (SCM) systems. Businesses rely on ERP systems to automate business operations, replace their legacy systems, and integrate core business processes and to help adding value and visibility. SCM systems help organizations to enhance relationships with supply chain members and stakeholders.  Therefore, the integration between ERP and SCM systems is a key to accelerate business performance.

SCM - Supply Chain Management and ERP - Enterprise Resource Planning have been gaining popularity among organizations over the last few years, across a number of vertical industries in India and globe. Software development companies in India have started their focus into developing software like SCM, ERP and business solutions.

An ERP system focuses on the management of business information by integrating disparate systems across functional groups such as inventory control, procurement, distribution and finance.  A Supply Chain Management system links in supply chain partners who help a company find the raw materials it needs to assemble/manufacture the products and services and deliver it to its customers.

The integration of Supply chain management and ERP system allows distribution and manufacturing organizations the capability to gain greater visibility of its operations. Also increasing speed, efficiency and overall customer satisfaction.

Need of Supply Chain Management (SCM) System

  • Managing contractual obligations that ensures a continuous supply and avoiding a service company’s delivery disruptions during business hours
  • Strengthening supplier relations for systematic synergy with suppliers and different lines of businesses
  • Managing risk and compliance to abide by organizational as well as industry specific compliances and regulations
  • Enterprise spending management that ensures procurement happens through the right suppliers and reduces overall costs
  • Establishing a single comprehensive supplier view and deriving insightful procurement analytics

Software development companies have developed many applications for TMS, WMS etc. to manage supply chain of the organization.

Supply Chain Management-Key Elements

Supply Chain Management consists of four phases viz. design, planning, execution, control and monitoring of supply chain events with the aim of creating value to build a competitive infrastructure. This enables the organization to leverage worldwide logistics. It not only synchronizes supply with demand, but also measures performance globally. A Supply Chain Management (SCM) system provides real-time perceptibility into operations, and integrates activities through improved supply chain relationships. This enables organizations to achieve a sustainable competitive advantage. Following are the four key elements for Supply Chain Management.

a) Supply Chain Planning

Supply chain planning is done to determine the set of policies and procedures that govern the operation of supply chain. Planning also includes the determination of marketing channels, promotions, respective quantities and timing, stock level and replenishment policies and production policies. Planning majorly establishes the factors within which the supply chain should operate.

b)  Supply Chain Execution

Requirement of Execution-oriented software applications for effective procurement and supply of goods and services throughout a supply chain. It covers manufacturing warehouse and transportation execution systems, and systems that provide visibility across the supply chain.

c) Supply Chain Monitoring

Monitoring is the ability to review the supply chain activities in real-time. It can be either to identify the status of specific activities or review overall performance.

d) Supply Chain Measurement

Measurement is evaluation of the actual activity against planned targets. This is often used with scorecards of benchmarks so that unfamiliar or undesirable variances can be identified and investigated.

Integration of ERP and SCM

ERP (Enterprise Resource Planning) and SCM (Supply Chain Management) systems provide various benefits to an organization in terms of capabilities and functionalities. The integration provides both intra-organizational and inter-organizational advantages. It also provides substantial leverage over competitors. The integration of ERP and SCM systems can be made easier with the following considerations:

  • Business priorities: Which one to implement first: ERP or Supply chain? In most cases, ERP starts with financials and business workflow, and companies build on from here.
  • Technology issues:If the ERP and SCM systems are on similar technology platforms, integration is easier to execute. Hence, decreasing time to ROI (Return On Investment).
  • Cost of implementation:Companies must consider and evaluate the cost impact of both systems being integrated.
  • Total cost of ownership (TCO): There may be cost savings and also better user experience if both systems processes are merged to reduce the points of data capture.

Benefits of Integrating ERP and Supply Chain Systems

Software development companies play a major role in integration of ERP and supply chain systems. If most projects follow some simple rules, companies can increase the chance of its success, deliver on time, and proudly involve the relevant group of users who utilize the system to maximum gain. Some benefits of integration of ERP and Supply Chain Management system are as follows:

  • Improved efficiencies, lower costs and improve productivity
  • Increased customer retention as it has the ability to provide better services to customers
  • Increased capability to manage resources through a streamlined process or an automated workflow
  • Enhancement of speed of tasks and increase in production by leveraging IT
  • Enabling organization to compete more effectively by providing ability to deal with with business changes in the future and to adapt to changing rules and regulations

Conclusion

ERP and Supply Chain Management systems offer various benefits to an organization in terms of capabilities and functionalities. The ERP system provides intra-organizational and Supply chain provides inter-organizational advantages, integration of both systems will provide a company with substantial leverage over competitors. This will also enable the organization to stand globally in the market as the organizations gets inter as well as intra organizational advantages.

Reference

http://archive.thoughtsoncloud.com/2014/06/need-supply-chain-management-system-today/
http://searchmanufacturingerp.techtarget.com/tip/SCM-systems-vs-ERP-systems
http://www.compudata.com/connecting-erp-and-supply-chain-management-implementation-strategies/
http://www.compudata.com/the-role-of-erp-in-supply-chain-management/

Difference between CRM and ERP

1. Introduction Software outsourcing companies in India have witnessed that business are adopti

Software outsourcing companies in India have witnessed that business are adopting CRM and ERP systems these days to accelerate business growth. CRM and ERP are two important technology acronyms that businesses need to know about. Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) are similar in many ways, as they are both used to enhance the profitability of a business.

(solutions, 2015) says, these systems are similar in some areas, and can be completely integrated with other. However, as their central functionalities are completely different, it’s best for a business to first look at them as separate entities i.e. stand-alone systems. When viewed independently, it’s easier to see how ERP and CRM each play a role in improving efficiency and increasing sales.

What is CRM?

CRM is an abbreviation for customer relationship management. It is a phrase used to describe all facets of interaction that a company does with its customers. The interaction may be either sales related or service related.

CRM at its simplest is a system with processes for managing a company’s interactions with existing as well as potential customers.

CRM is developed to include all sectors of the customer experience so as to keep the customer happy and in turn making them loyal and more valuable to the business. It is the process of identifying potential prospects, nurturing them and guiding them through the sales process to improve the business. CRM systems like Microsoft Dynamics CRM and Salesforce provide a standardized technique for collecting and sharing customer data and classifying customer interactions.

Since all of the data is standardized, it is easily shared across the business. Various activities that CRM performs are:  used by executives to create sales projections, by sales reps to maintain communication with clients, by shipping clerks to verify addresses, and by the billing department to create invoices. This lets the executives, managers, and developers to share data in software development companies.

What is ERP?

ERP is an abbreviation for enterprise resource planning. ERP software is used to manage the business. It integrates all aspects of an operation for product, including planning, development and manufacturing processes, human resources, finance and sales and marketing.

Like CRM, ERP allows for the rapid sharing of standardized information throughout various departments. Executives, managers, and other employees all enter information into the ERP system, creating a real-time, enterprise-wide snapshot.

The prominent feature of ERP is the shared database that provides an array of functions which is used by almost all of the departments of the organization. Implementation of this software enables all the departments of the organization to access up to date information. In addition to this, the entity is also able to analyze the performance, profitability and liquidity at any point of time.

The most important benefit of this software is that as it is integrated software the redundancy of data is minimized. The software also provides standardized procedures, processes and reporting as well that are common in the industries.

Key differences between CRM and ERP

According to (S, 2015), following are the major differences between CRM and ERP:

    1. CRM is defined as software that lets the organization to trace every transaction between the clients and a customer. Whereas, ERP refers to a software program that helps the company to manage its business processes going on across the company.
    2. ERP consolidates the information provided by different functional groups of the organization through systems like CRM, Supply Chain Management (SCM), and Human Resource Management (HRM) etc.ERP was developed earlier than CRM.

    3. The CRM is mainly utilized in conducting back office activities, whereas ERP is used to accomplish back office activities.
    4. CRM is oriented towards the management of relationship with customer of the enterprise while ERP is majorly concerned with planning the resources of the organization to ensure its best possible use.

    5. CRM focuses on increasing sales, but ERP gives emphasis on reducing costs.         

Consolidated comparison chart of CRM and ERP

Basis for comparison CRM ERP
Definition It is Computer software that ensures companies to record each and every transaction and interaction with the existing and prospective customers is CRM. It is Integrated pre-packaged computer software that lets the organization to manage and control the on-going processes in the organization.
Subset/Superset Subset Superset
Focus Increasing Sale Reducing Cost
Developed in 1990 1960-1970
Orientation Customers Enterprise
Utilization Front office activities Back office activities

Conclusion

Customer Relationship Management helps the organization to maintain a long term relationship with its customers. Software development companies in India are also leveraging this benefit. In addition to this, it is also useful to know about the preferences of the clients and develop trust. CRM enables the organization to know the preferences of the clients. On the other hand ERP combines various functional units of the organization together so that they can freely share the information. It lets the various functional units to communicate with each other on a real time basis through a centralized computerized system. Apart from the above differences there is commonality among the two softwares and that is, they both aim to enhance the profitability of the company.

 Bibliography

S, S. (2015, September 11). Differences Between CRM and ERP. Retrieved 04 21, 2016, from Differences Between CRM and ERP: http://keydifferences.com/difference-between-crm-and-erp.html

solutions, S. S. (2015, June 11). CRM vs ERP. Retrieved 04 21, 2016, from CRM vs ERP: What’s the difference?: http://www.sysco-software.com/crm-vs-erp/
 

Challenges faced in merger and acquisition for Information System like ERP

                &nbs

                                

Most mergers and acquisitions are decided upon at the management or group level without the involvement of IT in view of software outsourcing companies in India. But these decisions have a direct impact on the IT landscape. This leads to increase in complexity of integration – particularly data migration and integration.

In an acquisition, a target company is acquired and absorbed by the bidding company and after the deal only the bidding company exists, while the target company goes out of existence. A merger differs from an acquisition in that two companies join to form an entirely new organization. This involves integration of all of the components of the two companies to form a new company. In practice, the terms mergers, acquisition, and consolidation are often used interchangeably, because they differ only in terms of legal aspects. Software development companies or IT vendor whom company is in contact faces number of issues and challenges in integrating information systems of two different companies owing various reasons.

Globalization has contributed to an increase in the number of mergers and acquisitions of technology applications and services. Also the increasing rate of adoption of SaaS and Cloud computing had led to the need of merging and acquiring in companies.

Challenges prior-Merger or acquisition

The first challenge is selecting a right company that can extend the portfolio of the acquiring company. The next challenge then is to prepare businesses to address existing issues surrounding finance, compatibility, management, and legal areas. The other challenge deals with the difficulties that arise when trying to integrate people, systems, and business processes. Challenges surrounding integration of systems and business processes arise and overcoming them can be quite difficult if not done right.

Challenges post-Merger or acquisition

Organization must overcome the challenges arising post a merger and acquisition in order to achieve its business goals efficiently and effectively and to get a competitive edge in the global market. It is rare to find two companies with identical systems and applications especially when they run different business. This distributed structure of organizations makes it critical to deal with the shortcomings in order for that to be a successful merger or acquisition.

It majorly covers 3 aspects for implementing a successful integration of two different businesses for software development companies or external vendor or company’s internal IT department. These are: - 1) Strategic Aspect, 2) Organizational Aspect and 3) Technical Aspect. Each of these is elaborated in following section.

a) Strategic Aspect

For any Merger and Acquisition, first of all, the company must define its strategy and relating growth objectives. Second, the company must evaluate whether the business of the acquired company is identical to its own functions. After this assessment the company should carefully evaluate the IS of both the companies. The final step is the selection of the IS integration strategy with the choices of total, partial or no integration.

b) Organizational aspects

Organizational Fit and compatibility with the acquired or merged organization is the major organizational challenge that must be catered for successfully integrating the functions of both the companies, merged or acquired.

c) Technical Aspects

The major technical challenges that companies face following the merger and acquisition are as follows:

  • Insufficient IT integration

A lack of synchronization throughout the IT infrastructure can cause difficulties with everyday business processes creating complications and reducing the overall efficiency of the business.

  • Lack of visibility

With merging of two similar businesses can lead to duplication of customer information. This emphasizes the need of single view of customer information by implementing a proper integration of customer data information system.

  • Data integration

It is necessary to have access to updated information regardless of whether data lies on premise or in the cloud. Without proper integration of the information system of two organizations retrieval of information scattered across various systems, applications and services becomes complicated.

  • Compliance regulation

This challenge arises when two businesses have different compliance levels. Policies, procedures, guidelines are crucial for the business to run smoothly. Moreover, when the acquiring company is global, there is a need of imparting training and education about new compliance policies to its employees.

  • Data migration

When there are different information systems that are to be integrated after merger or acquisition there may be challenges for migrating data due to different formats. This leads to a need for converting the data in a common format to make the data migration accurate.

  • Cost of transition

The integration of Information System and data migration leads to incurring extra cost.  Costs from interdependent projects are rarely accounted for. Hence the cost estimation should be planned efficiently so as to make optimized use of resources and implement the transition in minimum cost.

  • Time to market

Low experience of what is to be done, how to do and what it would take - can lead to delayed visibility of enhancements in the company. The benefits that company gains after merger or acquisition should have a quick visibility and quicker time to market to obtain greater profitability.

  • Customizations

Customization may lead to low source data quality, inconsistency in data and gaps in expected result and actual customizations. Customization becomes necessary when two different companies are merging but at the same time customization should be implemented only where it is necessary.

  • Adverse change impact

When there is no communication, training or adoption plan for technology changes, this can have an adverse impact on the functioning of the company. Also the unanticipated changes can lead to adverse change impact on its legacy employees.

Conclusion

The integration of two Information Systems is a complex project which involves several challenges. The important things to be kept in mind are :

      • A large benefit can be achieved by high degree of integration of the different systems
      • A flawless communication strategy is important
      • Maintaining competitive parity in technology usage is essential
      • Focus should be on gradual IT cost reduction

Reference

https://www.infosys.com/Oracle/white-papers/Documents/enterprise-maturity-model.pdf
http://www.pacis-net.org/file/2008/PACIS2008_Camera-Ready_Paper_065.pdf
https://www.mulesoft.com/resources/cloudhub/mergers-acquisitions-it-integration
http://www.palgrave-journals.com/ejis/journal/v24/n2/full/ejis20152a.html