MaSSSoftech

By DHANYA ANN THOPPIL

BANGALORE -- Sharp cost cuts will likely help Indian software exporters improve their profitability in this financial year despite an economic slowdown that continues to weigh on revenue growth, the principal research analyst at Gartner Inc. said.

"Instead of revenue growth, well-managed (Indian) information technology companies will show an increase in their bottomlines (profits)," Diptarup Chakraborti told Dow Jones Newswires in a recent interview.

He expects these companies to report flat to low single-digit sequential growth in quarterly revenue in the year through March 2010, as demand from their main market - the U.S. - remains subdued.

Last week, the National Association of Software and Services Companies, or Nasscom, forecast a 4%-7% growth in revenue from exports for Indian technology companies, much slower than the 16% growth in the previous year.

In the April-June quarter, India's top two software services exporters by revenue - Tata Consultancy Services Ltd. and Infosys Technologies Ltd. - posted a better-than-expected 22% and 17% rise in net profit helped by cost-cutting measures, while revenue grew 12% and 13%, respectively.

Both companies reduced the number of their employees sequentially during the quarter in an attempt to cut costs in a tough environment.

Mr. Chakraborti said the focus on efficiency will help the software exporters attain higher profitability, with 19%-20% operating margins remaining sustainable over the next two-five years.

For the quarter ended June 30, Infosys posted a 60 basis point sequential improvement in its operating margin to 34.1%, while TCS recorded a 113 basis point expansion to 24.83%.

"There are lots of inefficiencies in the Indian IT services sector," he said. "Just increasing the efficiency will allow you to improve margins."

Last quarter, most Indian technology firms improved their operational efficiency by moving more work to their low-cost Indian centers, having a greater percentage of their employees on billable contracts and lowering travel costs.

Mr. Chakraborti said although the pressure on billing rates has come down, Indian information technology service providers will find it difficult to raise billing rates again after having lowered them.

Infosys said last quarter it expects billing rates for its outsourcing services to decline by about 5% this year.

The weak global economy hurt India's software companies in the past few quarters as customers cut technology spending and sought lower rates for products and services.

"Until the U.S. recovers, there will not be any genuine recovery in the Indian market," he said. "A recovery with steady growth across sectors will not happen before the second quarter of 2010."

The U.S. market accounts for almost 65% of the total revenue of most Indian technology majors.

Within the sector, revenue from information technology services is expected to increase in single digits, while revenue from the business process outsourcing, or BPO, segment will likely grow in double digits, or even high double digits in 2010, Mr. Chakraborti said.

In the year ended March 31, the BPO unit of Infosys posted a 39% jump in revenue to 13.00 billion rupees ($274.8 million).

"The BPO deals are big-ticket, and cost cutting is still a measure taken by most overseas clients through outsourcing to low-cost countries," he said, adding that large BPO companies may recover faster than mid-sized ones.

Business from the banking and financial services companies- a major contributor to software firms' revenue - and telecom firms are showing signs of stability, while orders from the manufacturing and retail sectors are still suffering, he said.

The analyst expects consolidation in the captive BPO segment, as large IT companies are scouting for attractive targets that come with assured business.

Last October, Citigroup Inc. sold its India-based back-office arm to Tata Consultancy Services Ltd. for $505 million, to help reduce its operating expenses and focus on its core financial-services operations.

"There are a lot of captives which are willing to sell out as they do not find any business sense there," he said.

Earlier this month, local media reports said Infosys is in the race to buy the back-office operations of UBS AG (UBS) in India and Poland, along with a multi-year business contract.

Write to Dhanya Ann Thoppil at dhanya.thoppil@dowjones.com

Del Mar, California – StockSource.us (www.StockSource.us/mndp.html) Reports on Stocks to Watch: Mundus Group, Inc. (MNDP.PK), ALCOA INC (NYSE: AA), U S CANADIAN MINERAL(OTC BB: USCN.OB), IB3 NETWORKS INC(OTC BB: IBNW.OB), Power Medical Interventions,

By Steve Goldstein

As the United States prepares to advance towards the establishment of a national health information technology infrastructure to improve care quality and healthcare cost by facilitating better interactions among the industry’s stakeholders, the various aspects for achieving this are now slowly taking form. The $19.2 billion Health Information Technology for Economic and Clinical Health (HITECH), authorized under the American Recovery and Reinvestment Act of 2009 (ARRA), has set off considerable excitement across the healthcare sector; with providers reconfiguring their information technology adoption plans for a certified EHR, and vendors delivering demand-driven products. With the incentive involving multiple years of investment, eligibility criteria for the grant was set for the “meaningful use” of technology.

With a small, overworked IT staff, SMBs can't expect to have experts in every important area. Limited resources require business owners to work with external vendors to integrate and support particular technologies. The challenge is to find the right vendor and develop a relationship that augments and complements the efforts of your in-house staff.

The following excerpt from Charles Nault's book, "Risk Free Technology," is presented by bMighty courtesy of Global Professional Publishing. In this book, Nault speaks to non-technical managers, executives, and directors about how they can better understand and promote an IT infrastructure that will support business objectives.

Charles Nault

Don't Miss: Risk Free Technology: The Problem

No one can know everything. Your IT folks will have specific areas of expertise as we discussed in the last chapter. You can't afford to keep on staff all the people with all the expertise in each particular technology that forms your total solution. But a solution designed by one person is most likely to be less effective than it could be. The level of knowledge and experience required to integrate technology effectively is extensive regardless of the size of your company. I have yet to encounter a company that has unlimited resources. It is specifically the limit of your resources that requires you to work with a company or companies you can trust to provide the information and advice you need, and to provide competent people to augment your existing staff.

I want to be clear that I am not talking about a vendor who provides a single product and helps to integrate their product into your network. You made need that at times. I am advocating a long term partnership with a company that provides a number of the solutions you need, and is competent and trustworthy enough to be the focal point for all of your projects, even if they have to partner with other firms to provide the entire solution. More about that further down. One very valuable resource that smaller companies don't employ, and many larger ones do, is a Technology Council. It sounds technical, but actually the majority of participants on the council should be from other areas besides IT. We used a very similar model to drive decisions regarding the technologies that we invested in and it has proven to be the very heart of our success. We formed a customer advisory board, comprised of a good cross section of our customers, who participated in very open and honest discussions regarding the technologies, services, and delivery mechanisms that our company needed to be proficient in to best serve their needs. Our success rate in introducing new technologies and new services improved dramatically.

That is exactly what you want your technology council to be and do. It should be a cross section of the people who use the technologies that are required to operate your business every day. The council should advise senior management and IT on a regular basis. It is pretty easy to get people to open up about what technologies will help them do their job better. You can get honest feedback on how your current network and IT staff are performing. Lead the discussion in a positive, effective, and productive manner and you will learn a lot. You may invite customers to participate in the discussion if they rely on your IT in order to work with you on a regular basis. You should also invite the trusted advisor for IT that you have selected after you follow the guidelines later in this chapter. There is so much going on in technology and it is easy to get wowed by new stuff. Focus is critical. Your technology council will help to keep your focus in the right places.

I recently read an interesting book called Freakonomics. One particular point they make has to do with knowledge, and the effective transfer of knowledge. The main theme of the second chapter was asymmetrical communication. They concluded that most businesses gain great advantage through the hoarding of information, which they cleverly dole out to their clients for large fees. They point to real estate agents (in a particularly unflattering way I might add) and insurance agents. The examples used in the book; real estate and insurance, are not anywhere near as complex as the business of running the IT systems that businesses need. I point this out to say that the cost of technology integration performed by the right people at the right time in the right way is actually a tremendous value, has far more daily impact on your business, and will heavily affect the bottom line. Inside companies I have often seen this hoarding of information used by technicians under the guise of job security. While the cost of technology is high, information regarding which technologies will help you, and which ones will not, is a major part of the value equation when engaging a trusted advisor and in forming your Technology Council. Still you are skeptical

At a recent conference I attended, the speaker from a research firm in New York called AMI Partners indicated that one of the major inhibitors to relationships between your business and a value added partner is a lack of trust. You believe that giving up control or management of any part of your Information Technology solution is risky and that you can do it more economically in-house. You are right in both regards. There is risk in going outside of your company. If your staff has a lot of knowledge and experience in a particular area of technology, implementing the solution will be cheaper using your staff. To have your staff support it is another story. That will cost you more in-house. Part of the fear is actually based on past experiences. Part of it is just the incredible resistance to change discussed in Change or Die. Listen, there are approximately 239,000 solution providers in the US alone. Just because you've had a bad experience, or even a couple of bad experiences, doesn't mean there are not partners out there that you can trust. It simply means that you have to take a more active role in investigating who you partner with to find just the right fit. Just as you damage your business every time you make a bad hire—and bad hires are your fault—you really damage your business when you choose a bad outside partner. You need a partner, and you must find the perfect partner for your business. Once you do, it must truly be a partnership.

IT systems integrators have a lot of knowledge that you don't have. IT is a knowledge-based business. The technology changes so quickly that unless you are in the technology business specifically, you cannot possibly stay abreast of what is best for your company. However, an integrator is only going to know what new technologies are right for your business if they know your business, and your network, inside out. This comes with time. The time it takes can be shortened by participation on your technology council. It can also be shortened if, once you choose a trusted partner, you hire them to do a complete assessment of what you have, the documentation you have, and the processes in place for implementations, change management, security, and support.

There is no doubt that a technician who spends every day integrating solutions into other companies' networks (as network integrators do) is eventually going to get good enough to integrate that solution into pretty much any environment. It does become as much an art as a science. Still, he is at a distinct disadvantage if he has never seen your network prior to this implementation. To be sure, there is always a first time, but if every time a technician installs a new solution on your network it is the first time, the chances of success are severely diminished.

Side note: I use "he" and "his" only because there are an overwhelming majority of technicians who are male. Our company has sponsored and participated in many events to encourage, highlight, and support women in technology. Ladies, technology is a great field, it pays well, and your intellect will be highly respected. Ask any women who is in it "my experience is that they seem to generally be the happiest technicians!

I have found, over the years, two opposite types of customer who have employed my company and other network integrators. The first are those who trust no-one but themselves, insist on hiring the lowest bidder, treat their integrator as an adversary who is trying to take advantage of them, and then try to take advantage of the integrator as often as possible. Interestingly, organizations with this attitude regularly hire high-priced consulting firms. That still confuses me, but I dare not speculate as to why that is.

The second are those who consider the integrator a trusted partner, establish a long term relationship, and treat them as a true partner. In twenty years I have never once seen the first type of client thrive. Even if their company somehow manages to do well despite their IT department, these types of companies have constant problems, incredible turnover, and everyone in the IT community eventually catches on to their mode of operation, so that only the least qualified and experienced vendors bid on their project, usually then end up losing money, and vow never to deal with them again. You'd think they might catch on to their own folly. Not true. I can count on one hand the number of such clients who eventually turned around, saw the light, and began to do things right. When they have, however, the transformation has been dramatic.

Courtesy of Global Professional Publishing, © Copyright Charles L. Nault 2009

CHANDIGARH: Punjab Information and Communication Technology Corporation (Punjab Infotech) has been developing Mohali as a hub of Electronics and Information Technology in the State.

Disclosing this here Tuesday Manoranjan Kalia , Industry and Commerce, Local Government Minister Punjab said that Punjab Infotech was also committed information technology to grass roots level in the State. More than 181 Franchise of Cal-C (Centre of Advance learning in Computer) were already providing education in the field of computer software and hardware all over Punjab, to fulfill the growing need of trained man power of Information Technology Enterprises solutions (ITES) in Industry Sector.

Kalia futher said that Punjab Infotech had also initiated establishment of Business process out sourcing (BPO) Training Center in Punjab. He said that there had been tremendous growth in soft ware export from Punjab region recording and increase Rs.500.38 crore in 2006-07 to Rs. 666.44 crore in 2007-08 total 257 software export units have been registered under (STPI) software training park India scheme in Mohali on till date. He said that Govt. of India had sanctioned another STPI center which was proposed to be set up at Patiala.

Kalia said that Punjab had realized that BPO and ITES industry are the potential sectors most suitable for the State and it was great potential of substantially increase its share of contribution in the total BPO revenue. Punjab's BPO industry has contributed significantly with over 10000 professionals working in this scheme in the State and quite a large number of professionals from this region are working in BPO companies located in Gurgaon , Banglor and other ITES center.

Industry Minister said that state had one of the highest densities of optic fiber landline and white goods and more and more communications companies are investing in the State, expending and improving the reach of service to the common man. During the year 2008-09 and 2009-10 Punjab Infotech target the new ICT Industries for investment in Punjab in general and following in the particular Infosys cognizant technology , WIPRO, TCS, more IT and BPO unit under STPI scheme at Mohali.

Let’s face it, without IT, there’s no business. But, IT has always been viewed by business executives as a cost center, versus a strategic asset. A relatively new work published by Peter Weill and Jeanne Ross puts forth some ideas how to turn this thinking around.

In IT Savvy: What Top Executives Must Know to Go from Pain to Gain, Weill and Ross say forward-looking businesses are transforming themselves with technology. They are building a “platform of digitized processes,” which are integrated environments, often anchored by an ERP or CRM system.

The core of success through IT apparently rests on competing on analytics, in which data from all parts of the organization is brought in and presented, via dashboards and the like, as insightful information to decision-makers.

Weill and Ross cite the following corporate success stories:

Aetna: “Aetna… uses the data generated from its core transactions to empower decision makers…” The authors report that Aetna was on the brink of failure in 2002, but employed savvy IT to turn itself around within five years. The company employed an executive information system to employ data to drive decisions. “Firmwide delivery of transparent and consistent performance data gave them an opportinity to train the company how to think about problems… Armed with useful data, Aetna’s senior managers started making what one observer called ’surgical decisions’ on prices in their proposals to institutional customers. The executive information management system was just the first step in using IT to make Aetna’s people smarter and more productive… Aetna started providing customers online access to medical advice and information about their accounts and history. These efforts have transformed Aetna into a highly respected and profitable health care company.”

7-Eleven Japan (SEJ): “SEJ uses IT to empower its people — all its people — with information…. Every salesclerk at SEJ has access to a handheld device for ordering stock… a constant flow of graphical data, showing recent sales, weather conditions, and product range information…”

United Parcel Service: “UPS equips its drivers with a DIAD (delivery information acqusiion device), which captures a customer signature and uploads data on each delivery to the company’s package information database. UPS analyzes this data to better understand the profitability of individual customers and packages, which leads to improved routing and pricing decisions.”

The ability to quickly access enterprise information made a difference to these companies, and illustrate the power of valid, actionable information to work smarter and faster. These success stories didn’t happen overnight, of course — there was plenty of sweating to achieve back-end integration, develop enterprise data models, and get business units on board. It takes visionaries both within IT and in the business to make this all work.

The Info 101 series by Examiner.com is a great concept. It allows each of us writers to answer provocative questions in our area of expertise. My chosen area is Information Technology and I hope to answer as many questions about IT as I can.

To make finding answers to your questions easier, I’d like to use this page as a gathering point for all of my Technology 101 posts.

1. Technology 101: What is the digital divide: There are misconceived notions about the digital divide. I’d like to try and clear them up, hopefully making it easier to close the gap.
2. Technology 101: What is the Minneapolis Wi-Fi network: A few years ago, Minneapolis, MN turned on a citywide Wi-Fi network, and depending on whom you talk to, they either love it or hate it. Find out why.
3. Technology 101: How to keep your computer updated: "Keep your computer up-to-date to stay safe" is a well-trodden IT security mantra. The bad guys don’t like to hear it though. Learn why.
4. Technology 101: What is social engineering: Just what is social engineering as it pertains to Information Technology? Find out how it pertains to you.
5. Technology 101: What is NoScript: The developer of NoScript understands that malicious Web sites use JavaScript and Flash exploits. So, he created a program where the user controls JavaScript and Flash code. See if NoScript can help you.
6. Technology 101: How to hire a botnet for cheap: Ever wonder how much it would cost to rent a botnet? I suppose not, still it’s interesting to see what the average cybercriminal has to pay.
7. Technology 101: What is the Emergency E-mail and Wireless Network: I’m surprised at how few people know about EEWN and its invaluable notification services. Check it out, it might save your day sometime.
8. Technology 101: What is Web 2.0: Web 2.0 has become a buzzword that no two people define in the same way. Learn what Web 2.0 is and how it has improved the Internet experience.
9. Technology 101: What is the App Store: Which is more impressive the iPhone or its App Store? I can’t answer that, as both are phenomenally successful. What are your thoughts.
10. Gadgets and Tech 101: Where DIY still rules: I was heartened by a recent Wired article to see that DIY is alive and doing well. It seems that all around the world, groups of DIYers are forming Hacker Spaces. Find out if you live near one.

One last thought: If you have a question about IT that you would like answered, please tweet me and I'll get on it right away.

Early-bird registration for the PCI Information Technology Conference has been extended until Aug. 14. The conference, to be held Oct. 4 to 7 in Tucson, Ariz., will feature a number of dynamic speakers, including Bill Hartnett, U.S. Insurance Industry Solutions Director for Microsoft, and James T. Harris, host of Milwaukee's top-rated radio show "The National Conversation With James T. Harris." (08/04)

[This post originally appeared on OVP Venture Partners' blog---Eds.]

Many observers, myself included, consider the 1990s the decade of the computer scientist. Work in digital bits and bytes not only generated significant wealth, it raised the standard of living for hundreds of millions of people around the world. However, as we close out the first decade of this century, I believe that materials and molecules have already supplanted bits and bytes as the powerful agents for the next round of prosperity and growth. This is the decade of the materials scientist.

Stanford University economist Paul Romer stated, “Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable.” In the 1990s and into the first years of the 21st century, this resource rearrangement was frenetically—and highly successfully—executed in the arena of information technology. Today, that resource rearrangement has slowed in IT and has accelerated in materials science. To put it another way, materials science is the new information technology and it is spurring advancement in the new energy economy of this and the coming decades. This shift promises some of the same economic momentum and standard-of-living improvements created by information technology in the 1990s.

Indeed, materials science and chemistry are today the nearly perfect embodiments of Paul Romer’s premise of technology and discovery as a key economic driver. These “hard” sciences create and combine chemicals, polymers, and solutions in an infinite and infinitely promising number of variations. The possibilities created by materials science open up countless innovative opportunities in the new energy economy—and elsewhere.

Several examples illustrate this idea:

—In a branch of physical chemistry known as exploratory synthesis, chemists mix selected elements at different temperatures and pressures with the only objective being: to see what happens. Recently, a mixture of copper, yttrium, barium, and oxygen was found to be a superconductor at temperatures far higher than anyone had previously thought possible, which will ultimately have a host of far-reaching implications for electricity transmission.

—My company, Seattle-based EnerG2, uses materials science to assemble breakthrough products at the molecular level. Right now, we’re focused on customizing electrode materials to enhance energy and power density in ultracapacitors, which store and release energy faster than conventional batteries. Controlling the molecular structure and assembly process of our engineered materials at the earliest stage possible provides flexibility, lowers costs, and maximizes performance. We effectively gave up on …Next Page »

Chris Wheaton is the co-founder and chief operating officer of EnerG2, an advanced materials and energy storage company in Seattle.

The Hartford Financial Services Group Inc. has named Robert Ingram senior vice president and chief information officer of its property and casualty operations' information technology organization.

He will focus on driving the overall IT strategy for The Hartford's property and casualty operations.

Ingram has more than 27 years of experience in technology and insurance, most recently serving as executive vice president and CIO at Safeco Corp. Throughout his career, Ingram has led a number of strategic technology projects focused on cost rationalization, legacy system consolidation, and strategic partnerships. Ingram previously served as CIO at USAA and spent 12 years at Accenture.

"It's not that easy bringing innovation to the federal government," says the nation's first chief technology officer.

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August 5, 2009
By David Needle: More stories by this author:

Aneesh Chopra
Aneesh Chopra
Photo: David Needle
MOUNTAIN VIEW, Calif. -- Aneesh Chopra, the country's first CTO, laid out an ambitious technology agenda before a gathering of IT industry insiders yesterday, while fielding some pointed questions about the government's technological readiness.

When asked about the Marines' recent ban of Twitter, Chopra, speaking here at the Churchill Club, said it was up to the military to decide how it wants to balance security requirements.

But Chopra, who President Obama picked in April to help drive technological innovation in the nation's government, also said changes are coming that could make the government's use of social networks and other Web technologies more practical.

For instance, "our government cloud computing strategy is not ready yet, but when we do it, it'll be safe and secure," he said.
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Still, he admitted that the government still has a long way to go before getting fully up to speed with current technology, and joked about his own frustration with outdated browsers in the White House that limit access to personal finance and other sites. "I can't hardly access anything," he said.

But while critics regularly take potshots and the government's aging infrastructure, Chopra said there are "some reasonably well-architected solutions in pockets of the government."

He also said he's a big fan of free and open tools that are easy to implement, although he isn't against commercial software per se.

"I have no problem with Oracle or Microsoft," he said. "But it costs 90 cents on the dollar customizing the stack. And when you can't share that customization, you have to repeat it for other departments. We're trying to set a culture of sharing and reusable solutions."
The search for a new cybersecurity czar
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Chopra also fielded questions about the surprise resignation of Melissa Hathaway, who had been acting senior director of cyberspace security.

Hathaway had been considered a top candidate for the position but, according to Reuters, withdrew her application out of frustration over the administration's delays in filling the post.

Chopra said Hathaway was staying on till later this month as the administration continues to search for a permanent replacement to the post, and said his department continues to work "fast and furious" on cybersecurity issues.

He noted that cybersecurity was is a high priority with all the government's technology endeavors, for instance, being "baked in" to the smart grid proposals from the beginning.
Spending on innovation

Several times during the evening, Chopra noted the government's $75 billion information technology outlay could be more effective, though it's a challenge.

"It's not that easy bringing innovation to the federal government," he said. "How do we further the cause of game-changing information technology rather than stifling it?"

Chopra then ticked off a few examples. For one, the government has earmarked $650 million to network schools, a move he said will "transform our educational system."

On privacy issues, Chopra said the administration has a policy framework and he is sensitive to citizens' concerns.

"My bias is that consumer preference shall be the leading driver of policy," he said. "And a focus on you having the decision making authority" of what information the government has access to."

Privacy concerns spill into many areas, including health care where the administration is making a big push to get medical records online and portable, giving consumer's more access to the records and flexibility should they change health care providers.

Chopra said that if the cybersecurity framework and safeguards are handled properly, "it could spur the next wave of growth and innovation" from the private sector.

He also said President Obama wants "fundamental payment reform" in health care.

"If the system rewards sickness, it doesn't help if it's electronic," Chopra said. "The incentives today are not designed for healthiness or wellness activity."

He also brushed aside criticism that doctors don't like the move to electronic health records because they don't like technology.

"There is not a doctor I know who hasn't downloaded a copy of Epocrates," he said, referring to the free mobile drug reference database. "It's accessible and they use it on their Treos and iPhones."
Tackling unemployment

With Silicon Valley being hit particularly hard by job losses and unemployment soaring to double-digit rates, it's no wonder that Chopra also faced a question about growing joblessness.

Chopra said the administration has several tech initiatives under way to help. For one, the administration has budgeted $50 million to support "innovation clusters" that he said could lead to the creation of new kinds of jobs using the latest technology.

"It's a modest amount, but it's one tool we have," he said.

He also mentioned the government is active in procurements, and "to the extent we can buy technology to spur job growth, we will."

Chopra said he's also working hard with the Labor Department to make it easier for every single jobseeker to have access to every available position.

"You think that's something easy, but it isn't," he said. "My hope is that by Labor Day, we'll have this done."