S’pore an attractive outsourcing hub: HP

S’pore an attractive outsourcing hub: HP

HP’s Bob Pryor feels the Republic can hold its own against India, writes AMIT ROY CHOUDHURY

DESPITE the growth of India as a major outsourcing destination, Singapore still remains an attractive place to operate out of, according to Hewlett-Packard’s (HP) global boss for outsourcing. Bob Pryor, HP senior vice-president & general manager for outsourcing services, noted that one of Singapore’s biggest plus points is its vibrant and strong labour market. ‘From an economic standpoint the Republic represents a very good place to have a base of operations,’ Mr Pryor told BizIT in an interview last week.

Mr Pryor: He noted that one of Singapore’s biggest plus points is its vibrant and strong labour market and that the Republic is a good place to have a base of operations from an economic standpoint
HP is among the top four global multi-vendor IT solutions and services provider and offers all types of outsourcing services. Globally, it has about 800 outsourcing clients, many of whom are either located in Asia-Pacific or have significant operations in the region. The company has nearly 69,000 professionals, working in 170 countries around the world, engaged in IT services.

Singapore is HP’s Asia-Pacific headquarters and it has around 6,000 employees here.

‘I think Singapore is a very vibrant market in terms of capability; not only to serve the local market but also to serve other countries with skills and expertise,’ Mr Pryor said. The HP official noted that a lot of people ‘have been pretty amazed’ with the success of India in outsourcing and that has created a lot of competition among other countries wanting to become significant destinations for offshore work which can drive higher levels of economic growth.

However, despite this, the skills and competencies available in Singapore ‘as well as the cost base of the employees’ are significant plus factors for doing business here, Mr Pryor noted.

He added: ‘The core infrastructure, network and computing environments that are available in the Republic also contribute a lot to making it an attractive base.

‘Power consumption and cooling (of computer systems) has become an important part of the infrastructure. So having the right environment and core infrastructure to support growth is a key element. The other key factor that Singapore has is what I think is a very stable economic and government environment.’ When asked what other things Singapore could offer to make itself an even more attractive destination, Mr Pryor said: ‘A wish list would include some kind of (financial) incentive that would make it more attractive to move investment and new jobs here.’

One of HP’s biggest outsourcing deals in Singapore is the one it signed with the Singapore Exchange (SGX) in November 2005. Mr Pryor noted that under the deal, SGX outsourced the management of its data centre and IT infrastructure to HP.

Under the contract, HP provides business continuity and availability solutions, service oriented architecture and IT consolidation processes to SGX, he added. Mr Pryor also noted that HP finds the Asia Pacific region a very interesting geography to operate in. ‘It represents two very distinct opportunities. One is from a market perspective and the other is as a low cost, high-value delivery centre.’

As a market, Asia-Pacific is witnessing robust growth in outsourcing services, while HP as a company has been achieving significant growth, Mr Pryor noted.

According to research agency IDC’s IT Services Tracker, outsourcing services during the first half of last year in the Asia-Pacific, excluding Japan (APEJ), grew at a 8.6 per cent annual clip. ‘While we cannot share specific growth figures for HP’s outsourcing services in APEJ, we can say that we have experienced double-digit growth, higher than the market rate in 2007 and are continually gaining market share in our outsourcing business from our competitors,’ Mr Pryor noted.

He added that with the world’s two fastest growing major economies, India and China located in the region, HP expects the growth to continue. The region also represents a robust offshore destination in terms of high level of capabilities and centres of excellence, he noted.

Thus the region is both a market as well as delivery centre, making it exceptionally attractive place to be in, Mr Pryor said.

‘Having very coherent competencies and skills coupled with a cost advantage environment gives the region a huge advantage.’ Mr Pryor noted that late last year, HP signed a significant outsourcing deal with the Indian banking group, the Andhra Bank.

‘Under the deal, HP India will implement a comprehensive core banking solution called Infosys Finance Core Banking Solution, over a five-year period . . . This will enable Andhra Bank to achieve significant cost savings and achieve better business outcomes in the dynamic and competitive banking arena in India.’

Discussing the challenge that companies like HP face in the outsourcing business from Indian outsourcing service providers like TCS and Infosys, Mr Pryor noted that while the Indian companies have a very strong back-end resources in India, their biggest weakness is in domain expertise in customer facing front office functions. ‘In contrast, HP has a very strong front office and heavy domain expertise and we have built global centres of capability to argument our back office capabilities,’ the HP official said.

He however added that these centres of capability are not necessarily all located in India but in other countries as well.

‘We are building capabilities all over the world. Our competence in hardware, servers and services makes us uniquely placed and we put a lot of emphasis on delivery centres,’ Mr Pryor said.

Most of the work we deliver to our clients are located in a centre of some type, either onshore, near-shore or offshore, he added. ‘We have centres all over the world, like in East Europe, India, China, Singapore and Malaysia… It’s all about supporting clients in the place and language of their choice.’
Source : Business Times - 14 Jan 2008

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