No, Robots Should Not Be Taxed

Proposals to tax robots have been debated by serious folks recently. The European Union considered but ultimately rejected the idea of taxing firms that use robots. And last week Quartz published an interview with Bill Gates in which he argues for a robot tax. These proposals follow a spate of recent articles on robots and automation, some of which argue there will be large job losses from robots and automation. These articles include one in the New Yorker, which profiled books by Martin Ford, Jerry Kaplan, Erik Brynjolfsson and Andrew McAfee, and David Autor’s article on workplace automation in Journal of Economic Perspectives, among others.

There’s no question that the potential increase in robots and automation requires policy makers to rethink fiscal policy for the 21stcentury (and other policy as well, such as education and retraining policy). But, based on the data we currently have, a tax on robots would be bad policy. Robot taxes would dissuade firms from investing in robots, which would lower economic growth, and, to the extent that robots complement labor in some cases, would lead to less hiring and lower wage growth.

What Is A Robot?

There are a number of problems with the idea of taxing robots. The first problem is definitional. In a manufacturing context, a robot typically refers to a robotic arm. As defined by ISO 8373, an industrial robot is an “automatically controlled, reprogrammable, multipurpose manipulator programmable in three or more axes, which may be either fixed in place or mobile for use in industrial automation applications.” But people also use the term “robot” to refer to software algorithms, including Amazon’s Alexa and Apple’s Siri, and many of us now routinely interact with chatbots, which have replaced human operators.

When we say we want to tax robots, do we want to tax all types of robots, including software robots and other forms of automation, or just robot arms? If we confine our definition of robot to a robot arm, then the robot tax ends up being a tax borne primarily by the manufacturing sector, and not by other sectors of the economy that will likely invest heavily in automation, including autonomous vehicles in trucking and transport, smart conveyor belts in warehouses, electronic checkouts in retail, etc. Manufacturing comprises about 9% of the U.S. economy on average, but up to 15% of employment in some states. Taxing investment in a handful of states based on an arbitrary definition of what does or does not comprise a “robot” does not seem to be good policy.

Robots Increase Economic Growth

Even if there were good ways to define a robot, there are good reasons not to tax the use of robots and automation. The Council of Economic Advisers’ 2016 Economic Report of the President cited research showing that robots can boost gross domestic product growth by 10% and labor productivity growth by over 15%, numbers similar to the impact of steam engines on British labor productivity growth in the 19thCentury.

Moreover, robots are complements to labor, not substitutes for labor, in many cases. For example, Amazon has been increasing the number of robots it uses in its fulfillment centers, but Amazon has also been increasing the number of humans it employs in its fulfillment centers. More broadly, as highlighted elsewhere, we need to do a better job collecting data on robots and how they are being used so that we can understand conditions under which robots are substitutes or complements. Therefore a robot tax would make it harder to achieve productivity growth and, to the extent that robots are complements to labor, a robot tax may perversely lead to fewer rather than more jobs.

Instead, Consider Proven Policies Such As EITC

Instead of a robot tax, policy makers should consider other policy options in response to automation. One idea with bipartisan support is to expand the Earned Income Tax Credit (EITC), which provides tax credits to working individuals who meet certain income thresholds, to a larger set of the population. If a person loses a job due to automation, globalization, or any other reason, the opportunity to benefit from the EITC provides an incentive to find another job. Research shows there are a number of other benefits of the EITC, including childhood development and poverty reduction.

Of course, new skills may be necessary for a new job, which is why vocational training and re-training programs are important. The United States spends less than 0.05% of its GDP on vocational training—less than most other OECD countries, a tenth of what Finland and Denmark spend, and a fifth of what Germany spends—and the U.S. number has been declining for the past couple of decades. At a minimum, funding for job training should be increased, and there are a range of options for how the training can be delivered and administered.

One recent idea that has gained popularity is a universal basic income (UBI). While UBI schemes vary in their specifics, the basic idea is to replace existing safety net programs with a single, unconditional cash transfer. While the apparent simplicity of a UBI scheme is appealing, a number of drawbacks have been noted, including that it does not reward work or provide the training needed to find higher paying jobs, and, depending on how it is structured, may leave many people worse off than they are today, particularly those at the lower end of the income distribution who currently rely on existing safety nets. Nevertheless, pilot studies on basic income schemes have been started, including in Finland, the Netherlands and Oakland, CA. These experiments will provide valuable data and, ultimately, insights for policy makers.

Thus, despite the legitimate concerns of its proponents, there are good reasons why there should not be a tax on robots. But Bill Gates is right to suggest the need for a larger debate about appropriate policies for addressing automation.

Source:, Robots Should Not Be Taxed

Political squeeze changes landscape for Britain’s outsourcing sector

The unexpected departure of the boss of Capita (CPI.L) highlights the challenges facing Britain’s biggest outsourcing companies as the government tightens the screw on businesses that provide vital public services.

Capita Chief Executive Andy Parker announced his resignation on Thursday after the business support services group reported a bigger than expected drop in 2016 profit, capping a 12-month period in which its share price has plunged by 50 percent.

Parker’s decision to step down later this year comes after rival Mitie (MTO.L) issued three profit warnings in four months and appointed a new CEO and CFO, having lost a quarter of its market value over the last year.

Profitability has come under increasing scrutiny in recent years as rising employment costs and cuts to local council spending have placed operating margins under intense pressure, leaving the likes of Capita, Serco (SRP.L) and G4S (GFS.L) with little room to make mistakes or absorb any drop in demand.

Serco CEO Rupert Soames, stung by the company’s loss of a fifth of its market value in a single day last month after it delivered an uninspiring outlook for the next two years, says that outsourcers now have to be more cautious about the work they take on.

“(Some years ago) the ambition of companies collided with a government that is getting … very, very, very tough on the terms and conditions,” he said. “The result has been, for quite a few companies, including mine, a very ugly car crash.”

“I think the pendulum is swinging back and companies are now becoming more cautious about what they bid for.”

The tightening of government purse strings has already proved costly for Capita, which earns nearly all its revenue in the UK, with roughly half coming from the public sector.


Its exposure was highlighted by a contract to create a single system to provide training for multiple government departments and agencies.

The 250 million pound ($306 million) contract was awarded in 2012 but was not renewed in 2015, instead being split into four components. Barclays estimates that the 60 million pounds in revenue from the contract in 2015 dropped to 40 million pounds last year and will virtually disappear this year.

IT and telecoms giant BT (BT.L) has also been hit, saying in January that it expects underlying fourth-quarter core earnings at its Business and Public Sector division to fall by a double-digit percentage year on year.

A source at the company said the government was driving a hard bargain, drawing up standard contracts that no longer provided the bigger margins that could be earned from long-term bespoke contracts.

“Where you have a business where those types of contracts come to an end, that can be quite a challenging transition to make, and that’s what we are working through,” the source said.

Asked if BT would now avoid low-margin work, the source replied: “Correct.”

Britain began outsourcing public services in the late 1980s under Margaret Thatcher’s government and enjoyed a boom period during Tony Blair’s time as Prime Minister at the turn of the century, with companies winning long-term contracts worth hundreds of million of pounds.

Private companies now handle everything from parking permits to immigration control and maintenance of nuclear warheads. But as the sector has matured and technology developed, clients have moved to shorter, standard contracts offering lower margins.

Complexity has also been reduced with the advance of automation and the standardisation of many IT services, while constraints on government budgets and Britain’s vote to leave the European Union have added to the pressure.


John Keppel of ISG, which tracks the global outsourcing market, said that shorter-term contracts effectively force companies to submit more competitive pricing bids because the increased frequency of tenders require that they take into account the latest advances in technology.

“There’s far more pace in the change in technology, so no one is willing to jump into a relationship that lasts longer than the immediate horizon. So now it takes six months to agree the terms to something that is going to be over in 18.”

A spokeswoman for the Cabinet Office, which helps to coordinate government departments, said it was committed to ensuring support for small businesses and growth and innovation through its public procurement.

Keppel said there are enough smaller firms to pick up the work, but the big players are having to rethink their approach after the government sought not only to cut costs but also to keep greater control of services after the outsourcing sector was the subject of a string of scandals in 2012 and 2013.

G4S, which operates in more than 100 countries and employs more than 600,000 people, has been heavily criticised for mishandling sensitive work, including its failure to provide enough security guards for the 2012 London Olympics.

Together with Serco, G4S was also investigated by the Serious Fraud Office after it charged the government for putting monitoring tags on criminals who were either dead or in prison.

G4S says it has “materially strengthened controls over the approval of major contracts” since then and has increased sales outside of Britain.

Serco boss Soames said that others could do the same, with the United States and Australia proving attractive.

“We’re not deliberately going to try to tilt our revenues away from any jurisdiction,” he said. “But what we do believe is in being present in several jurisdiction so that when the political winds change, we always have a safe harbour.”
Source: squeeze changes landscape for Britain’s outsourcing sector

Robotic Process Automation Market Key Players

Market Highlights

Global Robotic Process Automation Market is growing rapidly. High development in the field of technology, need of efficiency and automation in industry, changing government norms towards the manual operation works in the industry are some of the key drivers for the market of robotic process automation.

The Robotic Process Automation is a key component of business process management and has proven exponentially beneficial to the companies. Easy learning and flexibility of changing the tasks of robots of process is the key feature which is helping in the wide adoption of RPA. Once the RPA is trained and is molded into the desired work environment, it has been seen that the RPA has performed tremendously.

The global RPA market is expected to grow at USD ~7 billion by the end of year 2022 with ~57% of CAGR.

Taste the market data and market information presented through more than 30 market data tables and figures spread over 110 numbers of pages of the project report. Avail the in-depth table of content TOC & market synopsis onThe Robotic Process Automation Market Research Report -Forecast to 2022

Major Key Players

  • Automation Anywhere (France)
  • Blue Prism (U.K.)
  • OpenSpan (U.S.)
  • Celaton (U.S.)
  • Exilant (India)
  • OpenConnect Systems Incorporated (U.S.)
  • Verint Systems (U.S.)
  • Cognizant (U.S.)
  • Infosys Limited (India)
  • Atos Corporation (France)

Intended Audience

  • Technology Providers
  • Robots Manufacturing Companies
  • Software distributors
  • Software developing companies
  • Banking Industry
  • Research Institutes


The Global market of RPA is segmented on the basis of Organization Size and Industries. By organization size, the market has been segmented into SMEs and large enterprises where by industries the market consist deep study of segments- BFSI, Manufacturing, IT and Retail among others.

Market Research Analysis:

MRFR analysis shows that North America is dominating the market of RPA in the year 2016. High development in the IT industry and growing banking sector is driving the market in North America. Also, presence of developed countries in this region gives North America a competitive advantage over other countries. Europe is expected to stand as second biggest market due to the growing automotive and Healthcare industry in Germany and Italy. Asia-Pacific is expected to emerge as fastest growing market as China, South Korea and Japan are few of the biggest manufacturing driven economies. High demand of consumer electronic products in this region is also pushing the manufacturers to adopt RPA in the process.

Browse Full Report Details @

Source: Process Automation Market Key Players

7 tips for managing an IT outsourcing contract

Without dedicated and ongoing governance, carefully negotiated and documented rights in an outsourcing contract run the risk of not being enforced, and the relationship that develops may look nothing like what you envisioned.

IT organizations put great focus into drawing up their outsourcing contracts, but those agreements alone do not guarantee satisfactory outcomes. Attorney Brad Peterson has seen it time and time again. “Time and money are spent on drafting the contract—often a substantial amount of money. And a tremendous amount of potential value is created in that contract,” says Peterson, partner in Mayer Brown’s Chicago office and leader of its technology transactions practice.

But then the engagement is handed over to a well-intentioned supplier management team that wasn’t involved in the contract and often can’t make heads or tails of what’s in it. “It’s understandable. Contracts are complex and confusing, and relationship managers are selected based on their knowledge of technology or their skill in building relationships, not on their knowledge of how to run a contract,” Peterson says.

Those professionals managing the engagement often don’t understand how their conduct or communication can impact their company’s legal rights, which can cause a number of problems should disputes arise. “The result is that the benefits for which you negotiated hard and are paying great amounts may be lost,” says Peterson. What’s more, disputes may be more difficult to resolve, and those that aren’t becoming costly to litigate, requiring interviewing dozens of witnesses and sorting through thousands of emails to figure out what has happened and who is responsible.

The real value of IT outsourcing is achieved through active governance—not only of the projects in play, but of the communication and interaction between customer and provider. “Protecting the value of the contract after the ink is dry is about motivating suppliers to deliver on their promises,” says Peterson, “and preserving remedies for failure.” Peterson and Robert Kriss, litigation partner in Mayer Brown’s Chicago office recently share some best practices for governing the IT outsourcing contract once the ink is dry.

1. Control your communication

If someone on the customer side isn’t already designated in the contract, send a notice to the service provider at the start of the engagement identifying one employee authorized to speak on behalf of the customer. IT service providers are savvy. If they want to push a change in approach or document through, they will find the employee most likely to sign off on it. By designating one spokesperson, “You avoid the inadvertent but unfavorable change that occur to your contract when lower level people are approached by the provider to approve a procedural manual, for example, that ends up changing the obligations of all the parties,” says Kriss. “That makes it clear up front and in writing who represents and can bind the customer. It’s just good for the relationship and will result in fewer misunderstandings.”

Designating a customer representative enables the IT organization to control messaging, better adhere to the contract, and avoid situations where the communications or conduct of less informed personnel create ambiguity and uncertainty. And when disputes arise, you’ll only have to review the email of the one person whose communication has legal relevance versus dozens.

2. Require the provider to log requests and complaints

In many outsourcing situations, the only obligation of the customer is to pay the supplier. Not so in IT, where engagements required the customer’s contribution or collaboration. “The customer will tend to have obligations, and if the customer doesn’t perform those obligations, those may be an excuse for performance,” Peterson says.

However, should the IT outsourcing provider have a request for the customer or raise an issue of customer performance that it says excuses one of its obligations, it’s important to compel the provider to write the issue down and keep a log of all such problems.

Require a log showing requests and responses on contractual matters.

3. Clarify cloudy terms early

It’s important to keep the written record of the engagement as clear, complete and accurate as possible. When there are projects or situations that the contract does not explicitly address, the customer should clarify them early on and in writing. “That’s the best time to reach agreement because the parties are most open to cooperation at that point,” Kriss says.

If the details of a more granular project isn’t specified in the main agreement, write down a summary of what each parties responsibilities are and have everyone sign off on that before embarking on their work. “If there’s clarity in the written record, the likelihood of the situation getting worked in the context of outsourcing relationship is much greater,” says Kriss. “It matters so much.”

4. Send breach notices right away

Peterson sees customers who endured problems in their outsourcing relationships for years, but had no record of them because they thought sending notices to the provider would create tension or contention. That’s a mistake. Customer should send a written notice of breach or failure the very first time it occurs—and every time thereafter. “This needs to be a standard best practice that a company always uses,” Peterson says. They need not be combative, but rather polite and factual. “If you can establish that pattern, particularly with a single person comfortable sending these notices that are clear and useful, you will establish a much better record,” Peterson says.

All customer employees interacting with the service provider should be instructed to notify the designated customer representative if they think the service provider may have breached the contract. The designated representative can check with legal counsel to decide whether to send a breach notice. Without this written record, an IT organization can lose its rights to terminate for cause, for example. “A judge, jury, or arbitrator might well conclude that if a breach was not important enough to merit a written request to cure it shortly after the breach occurred, the particular breach should not later be considered alone or with other breaches as a sufficient basis to terminate the agreement,” Peterson says.

5. Never do the provider’s work before demanding the provider do it

When a project is faltering — the provider is missing milestones or a system is underperforming, the customer may be tempted to jump in to get the job done. However, if a customer takes action without warning the service provider in writing that it intends to do so and charge for the resources, the customer is likely to be stuck with the bill.

IT leaders should never assign their personnel to perform work that ought to be completed by the service provider without sending a notice of breach and providing an opportunity for the service provider to fix the problem. “That’s just fair,” says Kriss. “And fair is what matters in the context of dispute resolution.” The notice should state that if the supplier does not improve performance by a specified date, the customer will take steps to address the problem and will charge the provider or reduce its payment to cover the cost. Providing an estimate of those costs will support the case for reimbursement if the dispute is ever litigated.

6. Look for win-wins

An IT service provider at some point is likely to offer a waiver on a credit due for a breach and, in many cases, that is an opportunity for the relationship manager to trade that waiver for some future assurances. They might trade a performance credit waiver for a larger assurance on a future milestone or a root cause analysis of the breach and demonstration that the issue has been fixed. This approach “increases the change of successful outcomes, and you build a relationship built on trust and mutual understanding,” Peterson says.

7. Talk to legal counsels early—and often

If it isn’t clear already, creating a clear and written record of the engagement is important to preserving an IT organization’s contract rights. And “lawyers have an eye and ear for evidence and how documents will play in front of a judge or jury,” says Kriss. “They can be very helpful in essentially creating evidence helpful to the resolution of the matter through settlement or dispute resolution.”

Lawyers can find rights that are not apparent on the face of the contract and help the customer resolve issues. It may make sense to call a lawyer when there is a potential dispute involving a breach of the contract, when the provider asks for new charges for what appears to be in-scope work, or when modifying the master agreement, for example.

Clarity is the goal of contract governance

The goal of contract governance is to provide greater clarity. “With greater clarity comes greater certainty as to how a dispute will be resolved,” says Kriss. “That clarity increases the likelihood the parties will be able to resolve it and avoid litigation. If for some reason the cant, the record will be clear and reduces the cost of dispute resolution.”

These suggested governance practices are relatively easy to implement, says Peterson, and, if thoughtfully implemented, should not antagonize the service provider but rather reduce misunderstandings and keep the relationship on track.

Source: tips for managing an IT outsourcing contract

How to Boost Your Information Security When Outsourcing

Every time companies outsource their business processes or software development projects, they face the need to grant access to their corporate information. That usually prevents many of them from using outsourcing to its full capacity, unless they are able to choose partners, which can ensure full data security. Here is an overview of the options to choose among the outsourcing service providers, and the possible ways of avoiding the main pitfalls in terms of protecting  sensitive information.

Near-shore technology shops

These are business process outsourcing service providers and software development companies established in your own country. Yes, they charge a higher fee, but that is covered by no need of expensive business trips abroad, and the necessity to deal with a cultural and time zone gap. You have the possibility to communicate with your partners as often as is necessary, and keep your hand on how your information is used and how many of the outsourcer’s staff are authorized to use your data by conducting regular audits.

In case of any disputes, you and your corporate information are protected by the law of your country and an agreement encompassing all the sensitive issues concerning information security.  In other words, there will be less unpleasant surprises while near-shoring due to common mentality and legislature.

Hiring a freelancer

This is the cheapest way to outsource your tasks, but also the trickiest one. First of all – how do you find a real person; through accounts on recruiting sites or through word of mouth? Another danger is how do you make sure the freelancer uses your information safely? No-one can guarantee that your contractor keeps all his or her devices protected enough regarding firewall management, network security, vulnerability scanning, anti-malware or endpoint security.

Unless you hire someone from an agency, in which case the organization you cooperate with ensures all the necessary steps for information security. Thus, opting for a freelancer in order to cut on the costs you may lose control of your business processes and end up paying with your own data security, which is not the price you would like to face.

Outsourcing to a company in a region with lower market price for the service

Such agencies provide you with professional and reliable experts to whom you can grant access to your information. You sign a contract which will take on liability for your information security and will vouch for their staff. This way you may avoid a lot of drawbacks you face when outsourcing to a freelancer.

This option seems to be the happy medium between the two abovementioned and gives you a lot of advantages in terms of qualified staff and funds economy, but you should keep in mind that you are working with a foreign company, which abides by the laws of its country. Is the data protection policy of your outsourcing service provider sufficient? Does the country of your partner have enough legislatures on private information, and how secure is sensitive data there? Do you and your service provider understand data security the same way?

It should be safe to sign a data transfer agreement, eliminating any risks of going to court in a foreign country before you grant access to your information. Such agreement should stipulate whether the corporate and sensitive data may be processed according to the law of your country or according to the outsourcing provider’s countries laws. It should also be kept in mind that according to the legislature of most countries, the confidential information may be disclosed upon the request of an authority.

You may as well resort to the protection of information transmission channels, data encryption, and access management while outsourcing abroad as the means of data protection.

It is a fact that although you may outsource your projects, you cannot outsource the consequences of what happens when your data security is breached. Therefore it is necessary to weigh up all the circumstances before you go for one of the abovementioned variants.

If you need to subcontract some trivial tasks and you are on a tight budget, you may opt for a freelancer, however, if you take the matter of your business security seriously, you would want to cooperate with a reputable legal entity.

Source: to Boost Your Information Security When Outsourcing

Robotics, AI And Cognitive Computing Are Changing Organizations Even Faster Than We Thought

The world of AI, robotics and cognitive computing are changing business even faster than we thought.  JPMorgan Chase & Co now uses software to perform the mind-numbing job of interpreting commercial loans, reducing 360,000 hours of lawyer time each year.  AI software can now identify leukemia in photos and X-rays, learning faster than technicians. reduced new hire training to only two days because of its newest robotics used in shipping. And the stories go on and on.

Is this real and widespread around the world?  The answer is yes, and the pace is quickening.

Our just-released research (Deloitte Human Capital Trends 2017) shows that companies are not waiting for such technology to be perfected: they are implementing it now. Thirty-eight percent of companies in our new research (10,400 respondents from 140 countries) believe that robotics and automation will be “fully implemented” in their company within five years , and 48% of these companies say their projects are going “excellent or very well.”

Will this technology create massive unemployment? Are we entering a “jobless” economy where only software engineers and designers have jobs?

Our research says no. Among the companies we surveyed, 77% believe automation results in “better jobs,” 50% are investing in retraining workers to work side-by-side with machines and 33% expect people to do “more human tasks” augmented by robotics and AI. In fact only 20% of businesses believe automation will result in job loss.

As Automation Increases, Organizational Redesign Becomes The #1 Issue

It’s clear that the way we work has changed, yet or organizations have not yet caught up.  Business productivity remains low, employee engagement is flat (Bersin by Deloitte research with Glassdoor), and workers feel more overwhelmed and over-worked than ever. In fact, research by Project: PTO shows that US workers took almost a week less vacation in 2015 than they did in 1998.

What’s really going on? In a simple phrase our organizations have become a “network of teams,” and they no longer function well in the functional hierarchy of the past. The concept of a formal “job” with a job description is starting to go away. We now hire people to do “work;” we source them for skills and capabilities (not necessarily credentials); and we manage people around projects, customers, and products, not “roles.”

ING Bank, a pioneer in the implementation of automation and organizational redesign, just eliminated several layers of management and is now creating agile teams in every part of the organization. GE, Cisco, IBM and Deloitte are doing the same.

When we asked companies to prioritize their talent challenges, the #1 issue was “building the organization of the future,” which 88% of companies cited important and 59% rated urgent. Are companies ready?  The answer is no. Only 11% of these companies told us they understand how to make this happen.

As one analyst put it, “ Organizations that are designed for success in the 20th century are doomed for failure in the 21st. ” A good rule for us all to remember.

How do we redesign the organization to deal with increased automation at work? How do we empower teams to be agile, purposeful and engaging? And how do we change the workplace so people can be more productive, energetic, and focused?

While the answers to these questions are complex, I believe we have unlocked many of the secrets. The just-released report, Deloitte Human Capital Trends 2017, titled “Rewriting the rules for the digital age,” describes the top ten issues, and gives a set of “new rules” for each.

(This study included a detailed survey with more than 10,400 respondents from 140 countries and dozens of detailed interviews with business and HR leaders around the world.)

Source:, AI And Cognitive Computing Are Changing Organizations Even Faster Than We Thought

Image credit: Shutterstock

An overview of IT outsourcing strategies, challenges in 2017

Over the past three years, the IT environment has seen an increase in popularity for Cloud and enterprise systems, such as Software as a Service (SaaS) and Platform as a Service (PaaS). These systems have paved the way for new outsourcing strategies together with new challenges in outsourcing provider selection and integration.

The new service-based norms of outsourcing became mainstream: pay-as-you-go models took over in a bid to attract even small service providers and new skills needed to be developed to deliver to expectations.

Global political developments: The course of IT outsourcing will be determined by recent development in the political sphere, both in Europe and worldwide. Legal implications may impact delivery centres, and partners need to agree on a common policy for adherence and feasibility.

Data security: Protection of information during outsourcing has become one of the major issues of concern for companies. IT outsourcing providers should enforce internal information security practices and pay major attention to their non-disclosure policies. If there is any breach in the security process, this will have a negative impact on the relationship between client and outsourcing provider. Information security will therefore remain a major focus for outsourcing companies in 2017.

Protection of information during outsourcing has become one of the major issues of concern for companies

Automated systems and processes: Automation is unavoidable and software developers have to keep up the pace in 2017. Automatic processes take less time and are more efficient. Automation will help standardise processes, reducing direct costs and extending benefits to suppliers, buyers and customers.

Call centres (BPO): The traditional mega big call centres, as we know it, will disappear gradually or, at least, their operations will be greatly reduced. With technological advances made in Artificial Intelligence (AI), self-service tools become more widespread. This is putting at risk the traditional call centres. Bigger volumes at call centres will be taken care of by virtual agents and chat bots and will replace the need for human resources. A major company in Malta has already started to look for new call centre platforms to better serve their customers in the coming years.

Talent pool accessibility: Companies have adopted talent search, as this proves to be cost-effective in the long run in having skilled and professional people. Most IT companies in the developed countries perceive the urgent need for qualified specialists and are ready to accept remote skills, if that is the key to effective and on schedule work performance. The past trends will also be applicable in 2017 and more pressure is applied on recruitment specialists to provide skilled professionals in a timely manner.

Our local IT outsourcing branch, Castille Labs, will be using Castille’s recruitment experience to continue recruiting the best candidates for our clients as well as adjusting our internal processes to embrace 2017 with confidence.

Source: overview of IT outsourcing strategies, challenges in 2017

Global Application Lifecycle Management Market


The market study covers the present scenario and growth prospects of the global application lifecycle management market for 2017-2021. The report also lists cloud-based ALM and on-premises ALM as the two major segments based on deployment models. The cloud-based ALM segment accounted for 58% of the market in 2016.

Request a sample report:

Technavio’s sample reports are free of charge and contain multiple sections of the report including the market size and forecast, drivers, challenges, trends, and more.

Technavio ICT analysts highlight the following three market drivers that are contributing to the growth of the global ALM market:

  • Use of ALM provides improved cost saving
  • ALM drives productivity and quicker time to market
  • ALM helps focus on real-time decision-making

Use of ALM provides improved cost saving

ALM helps organizations reduce costs and provide on time services to markets. It also enables the centralized management of project portfolios. Centralization allows organizations to enhance the decision-making process and thereby improve the performance of the organization, eliminate duplication of effort, reduce operating costs, and maintain multiple data centers.

These services also help organizations increase their savings, as it gives the IT managers and chief information officers (CIOs) visibility of application cost and associated support that is required to get back the expected ROI.

According to Amit Sharma, a lead analyst at Technavio for enterprise application research, “ALM makes it possible to track developments in various projects at a rapid pace, which enhances the processing speed and response time. The service can also facilitate rapid identification of issues, which helps organizations avoid redundant or poor IT investments.”

ALM drives productivity and quicker time to market

ALM helps organizations to achieve higher productivity by providing end-to-end performance report. ALM helps speed up the development and test cycles, which helps in quicker time to market. The functions in organizations are fully automated and streamlined when ALM software package is used, resulting in rapid designing, delivering, and deploying of the software.

“Furthermore, ALM helps to centralize the management, attain real-time visibility into the application delivery process, and implement consistent workflows and processes across the application lifecycle, thereby reducing the duplication of effort between projects,” says Amit.

ALM helps focus on real-time decision-making

ALM helps monitor business application management services. It provides flexible, integrated, and real-time decision-makingsupport for those in the top management, which, in turn, helps to improve responsiveness across an organization. Diverse elements of multinational environments, such as language, currency, and accounting standards, are covered in a single application management service.

The service provides for better analysis and planning capabilities. It enables comprehensive and integrated management of related businesses and corresponding data. This integration allows the complete deployment of various kinds of decision-making support systems and project management functions.

Source: Application Lifecycle Management Market

Gartner Positions Infosys as a ‘Leader’ in Magic Quadrant for Oracle Application Services

Infosys (NYSE: INFY), a global leader in consulting, technology, outsourcing and next-generation services today announced that Gartner, Inc. has positioned Infosys as a ‘Leader’ in its Magic Quadrant for Oracle Application Services in Europe, the Middle East and Africa (EMEA) and North America.

The report evaluated 16 vendors in EMEA and 20 in North America for the full-life cycle of Oracle application services, spanning project-based implementations and multiyear application management services (AMS). Gartner analysts evaluated service providers for their ability to deliver a comprehensive set of implementation and management services across the Oracle portfolio of products for EMEA and North American clients. Infosys was positioned highest for its ability to execute in EMEA.

An Oracle Cloud Elite partner, Infosys drives innovation and new opportunities for its clients with next-gen digital technologies so they can achieve higher efficiencies and increased customer engagement.


Ravi Kumar, President and Deputy Chief Operating Officer, Infosys

“We believe that being identified as a Leader in Gartner’s Magic Quadrant validates our core strength of delivering value to our customers leveraging our IP and the best-of-breed technology solutions, and our commitment to developing a comprehensive set of Oracle application management services across the Oracle product line. Infosys works closely with Oracle to rethink and redesign application services by incorporating innovation and agility. We are gratified to see Gartner’s recognition of our leading work in this critical area.”


Gartner’s Magic Quadrant for Oracle Application Service Providers, EMEA

Gartner’s Magic Quadrant for Oracle Application Service Providers, North America

Source: Positions Infosys as a ‘Leader’ in Magic Quadrant for Oracle Application Services

Protectionism and Outsourcing: Brace for Impact

The new U.S. administration has made it clear that protectionist policies and immigration reform are important priorities.

The new U.S. administration has made it clear that protectionist policies and immigration reform are important priorities. As a result, organizations dealing with strategies regarding the use of offshore resources have been carefully watching what transpires, from campaign promises and press conferences to the President’s tweets. The question is, what do these potential policy changes mean for organizations using third-party services, particularly third-party offshore service providers? What are some of the fundamental things they should be thinking about as they try to plot out what they should be doing over the next 6-18 months?

For one thing, the new administration’s efforts related to limitations for H-1B visas, which allow U.S. employers to temporarily employ foreign workers in specialty occupations, has already impacted offshore outsourcing providers, says Dave Brown, Global Lead for KPMG’s Shared Services & Outsourcing Advisory practice. “It really limits them in being able to place qualified resources into the U.S. job market and to build out their capabilities with a quality solution,” he says.

In addition, there is the issue of a minimum threshold or salary for H-1B visas — increasing it drives up the cost base for service providers. “It puts pricing pressure on them when they’re trying to sell more business to U.S. companies,” says Brown.

Protectionist-based tax reform, where products developed outside the U.S. and imported may face heavy taxes, are also being closely observed, since there is a concern that third-party outsourcers providing services back to the U.S. for large corporations will be part of a “next wave” of new taxes. “Companies need to be aware of their outsourcing contracts and what impacts those services taxes could have,” says Brown.

Finally, as immigration laws change, not only does the restriction of H-1B visas have an impact on service providers sending employees to the U.S., but also the service providers themselves use the ability to leverage an H-1B visa to attract employees into their company. “Potential employees expect they can join the firm in an offshore location and be relocated to the U.S. for a period of time to increase their skills, to broaden their knowledge base and to provide them with an experience of working in the U.S.,” says Brown.

In this age of outsourcing uncertainty, Brown cites three important areas that organizations should investigate and be aware of as they develop their outsourcing strategies and policies:

1. The service provider’s global sourcing model and risk profile.

Organizations should look carefully at their outsourcing contracts, to identify whether there are termination rights for partial opportunities, for example, or what happens if automation is applied, says Brown. “If the scope of the work does decrease due to policy changes, what impact that does have on the contractual term?” The business needs to look at the resource mix and consider any tax implications that may come by setting up some of these contractual agreements with service providers. In addition, it’s important to assess the risk profile of the outsourcing provider to get a better handle on the potential impacts on the organization’s sustainability if some of these immigration and tax rules come through.

2. Automation opportunities related to outsourcing contract work.

Automation may increase in popularity based on changes in protectionist policies, says Brown, since it may affect what you may already have outsourced to a third party — by eliminating some or all of the work altogether. “The benefits of the original contract to move work to a third party may have been that they were moving it to offshore locations and applying some labor arbitrage savings, but automation kind of negates that so it almost becomes a wash” says Brown. “So why wouldn’t you take the remaining resources and bring them back onshore and build out a better succession plan, retool, reskill the individuals so that you can actually take advantage of creating jobs in the U.S. and really leveraging the automation tools that are there?”

3. The power of social media.

As organizations continue to follow President Trump’s comments and others around social media related to changes protectionist and immigration policies, there is clearly a ripple effect and reaction across marketplaces. This means being prepared for anything since things can change at any moment, says Brown. “Companies need to consider what this all means to them and remain aware, because at some point some of the words floating around in social media will make it into legislation and potentially become a bill,” he explains. “If that does happen, by that time if you react it’s going to be too late.”

Businesses should prepare their outsourcing strategies now

“Be prepared” is not simply a Boy Scout motto. It should be a motto for all organizations looking to react appropriately to changes in immigration and tax legislation as they affect outsourcing contracts, says Brown. However, many companies are not putting themselves in a position to deal with changes in an agile way. “Firms are in a position to see that there will be an impact, but they’re not necessarily preparing themselves and creating a strategy,” he says.

For example, there are unaddressed issues, such as if businesses do need to bring jobs back to the U.S., how will they be able to find the resources to do that? “We talk about the war for talent and how challenging it is, and it’s always in our top five concerns of companies to find the right talent,” says Brown. “I think companies aren’t prepared for the ability to find these resources if they were to bring them back onshore. There is an opportunity to do so but I don’t think they realize the full breadth of what it means to bring jobs back from a third party.”

When doing this kind of talent assessment, he adds, it’s essential to look at the supply pool and to make sure the organization is comfortable not only attracting the talent they need but retaining them and continuing to build a career path for them. “That would be what I’d consider the biggest gap in the analysis we’re seeing today,” says Brown.

Source: and Outsourcing: Brace for Impact

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