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MNCs restructuring international projects to cut costs: Mercer

New Delhi: Faced with declining profits, multinational companies (MNCs) are restructuring their international programmes by shortening overseas assignments and hiring expatriates locally, reports PTI quoting a survey by global HR consultancy firm Mercer.

According to Mercer's 'International Assignments Survey 2010', covering over 220 multinational companies (MNCs) across all industries, firms are forced to balance cost constraints on international assignments while retaining the competitive edge over their rivals.

The survey revealed that, "Organisations globally now have more structured international assignment programmes that put emphasis on shortened assignments, hiring locally and eliminating non-essential benefits in an effort to manage costs more effectively."

About 50% of the companies surveyed reported a rise in short-term overseas assignments, which are becoming more aligned with organisations' objectives due to their quick approval process.

Around two-thirds of companies globally have developed special policies for short-term assignments, it added.

"As the global economy moves slowly into recovery mode, particularly for certain regions such as the Asia-Pacific, the focus on cost containment is still prevalent among firms, particularly when it comes to international assignment policy," Mercer Asia-Pacific global mobility leader Cathy Loose said.

Moreover, MNCs are trimming costs by hiring expatriates locally in project countries instead of paying more to bring in talent from outside.

According to the survey, around 50% of firms have increased or plan to increase the number of expatriates hired locally.

Given the financial and administrative costs associated with international assignments, most firms are reviewing their global expatriate policies.

Nearly nine out of 10 MNCs worldwide have been revising or are planning to revise their expatriate policy, which includes benefits and allowances, in order to reduce expenditure, the survey added.

"As a result of the economic climate, many companies have had to postpone planned foreign investments and have turned the focus to their existing overseas operations," the Mercer report stated.

MNCs are still cautious about the prevailing economic climate globally and are cutting costs to maintain the profitability of their businesses.


Bharti selects IBM to manage IT for its African operations

New Delhi: Telecom major Bharti Airtel today said it has selected global technology giant IBM to manage computing technology and services for its African business, reports PTI.

The company has selected IBM to manage the computing technology and services that power Bharti Airtel's mobile communications network spanning 16 African countries, Bharti said in a statement.

The strategic partnership will enable the telecom operator to scale up its network and systems to cater to more than 100 million African customers by 2012, it added.

"There are huge opportunities throughout Africa to transform how people communicate and how communities interact.

Delivering on that opportunity through affordable mobile communications for everyone is our focus," Bharti Airtel chairman and MD Sunil Bharti Mittal said.

Under the 10-year planned agreement, IBM will consolidate 16 different IT environments across Bharti Airtel's African operations into an integrated IT system and will oversee the management of all of the applications, data centre operations, servers, storage and desktop services.

An agreement is expected to be finalised in the fourth quarter. However, the company did not disclose the deal size.

IBM is already handling the IT operations of Bharti Airtel in India.

"We are delighted to extend our successful relationship with IBM in South Asia to Africa. This transformational business delivery model, which will be a first in Africa's telecom industry, will bring enhanced efficiencies to our operations and help us deliver world-class mobile services to our customers," Mr Mittal added.

IBM will deploy and manage information technology infrastructure and applications to support Bharti Airtel's goal of bringing affordable and innovative mobile services to remote locations in Africa.

When the agreement becomes final, IBM will provide customer support applications for customer relationship management, billing and self-care that will empower customers and assist Bharti Airtel in delivering innovative and convenient second generation (2G) and third generation (3G) mobile services.

In addition, IBM will deploy advanced technologies created by IBM Research, including the spoken web - a voice-enabled Internet technology that allows users to access and share information simply by talking over an existing telephone.

Bharti Airtel plans to replicate the success of its relationship with IBM in India by expanding its customer base to the extent that the entry barrier for African people to own a mobile device becomes lower.

IBM will also build automated internal systems for Bharti Airtel's business, which will result in enhanced efficiency and empowerment for employees through applications that deliver processes and data on a real time basis - both on PCs and mobile devices.

Bharti Airtel has operations in Burkina Faso, Chad, Congo Brazzaville, Democratic Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Seychelles, Sierra Leone, Tanzania, Uganda and Zambia.

"We see our strategic relationship with Bharti Airtel as a powerful example of building a smarter planet. We have achieved great success together in India and now we are bringing that model to Africa," IBM President and chief executive officer Samuel J Palmisano said.

The company had acquired Zain's African operations for $10.7 billion. On 30 March, 2010, Bharti had entered the deal to acquire Zain Telecom's operations in 15 nations, excluding Sudan and Morocco. Zain had operations in 17 African countries.

This acquisition, besides giving Bharti its much-desired presence in Africa, made it the world's fifth largest wireless company with operations across 18 countries and a subscriber base of around 179 million.


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