Cost Savings In Outsourcing

A March 14th article in the Financial Times entitled, “Time to focus on core functions,” by Brian Hook, highlights the fact that financial institutions are finding that as they increase their outsourcing, they are increasing their cost savings. Ravi Ramamurti, Professor of International Business at Northeastern University's College of Business Administration, states that some executives are not impressed with the savings. "Companies are discovering what the boundaries are of activity that they should perform at home in high-cost locations versus far away in low-cost locations," says Professor Ramamurti.

To read the full article, go here:
http://www.paradigmshiftpr.com/digitalbusiness.htm

Prof's thoughts on Dell

While much of the media coverage of the impact of Dell’s recent accounting practices has been negative, Harlan Platt, a finance professor and corporate management expert at the College of Business Administration at Northeastern University, actually believes that this might be the time to buy Dell stock.

“Dell has stumbled in the market place during the past 2 years. Now their accounting practices are surfacing as another area of shortcoming,” Prof. Platt points out. “For several years Michael Dell had turned the reigns over to others as he attempted to change his role. Last month he returned to active duty. It is probable that this accounting information is now coming out because of Mr. Dell's return and re-involvement. “Dell stock in the aftermarket was down $2, but in today's trading it is nearly unchanged,” Prof Platt adds. “If I am correct, however, then this may be the ideal time to pick up Dell stock since it has identified ‘all’ of its issues and can now begin to address them.”

Below is Prof. Platt’s bio:

Harlan D. Platt, Donald J. Harding Professor of Finance, Finance and Insurance Group. Professor Platt’s research and consulting interests include corporate bankruptcy, crisis management, and short-term equity price recoveries. He created the certification exam for the Turnaround Management Association. Harlan is a member of the board of directors of Republic Financial Corporation and the advisory board of XRoads Solutions LLC. He previously served on the board of companies on the New York Stock Exchange, the Dublin Stock Exchange and the NADAQ. Before joining the College of Business Administration faculty in 1981, he was director of electricity research and forecasting for Data Resources, Inc. Professor Platt holds a BA from Northwestern University and MA and PhD degrees from the University of Michigan. He is the author of eight books including Why Companies Fail: Strategies for Detecting, Avoiding and Profiting from Bankruptcy; The First Junk Bond: A Story of Corporate Boom and Bust; Principles of Corporate Renewal, A Casebook on Corporate Renewal; The Phoenix Effect: 9 Revitalizing Strategies No Business Can Do Without; Chipping: The New Stock Market Method for Surviving Turbulence and Hitting a Hole in One; and Counterintuitive Investing. His articles have appeared in a number of publications including Journal of Banking and Finance; Journal of Business Finance and Accounting; Journal of Accounting, Auditing, and Finance; Journal of Economics and Business; Journal of Business Research; Quarterly Journal of Business and Economics; and The Journal of Applied Corporate Finance. In 1997-1998, he was the Klein Lecturer at Northeastern University. Professor Platt was the Associate Editor-Finance for the Journal of Business Research.

Cisco/Webex Acquisition

Mr. Beach, President of Boston Corporate Finance and M&A International provides some thoughts on the Cisco/Webex acquisition that was turned into a pitch letter.

"This is a very clean and clear strategic transaction. As the need for integrated communications throughout large enterprises develops, there are two primary pieces required for smooth execution. The first is a strong network infrastructure. The second is a proven platform allowing for an intuitive interface for managing communication sessions which is robust enough to satisfy the needs of a demanding customer base. Cisco, already the #1 network infrastructure provider has just acquired the best known and must reliable software platform for integrated communications. Both companies are the “standards” for their respective areas, and together they will combine their marketing and brand positions to move their customers into a much deeper penetration of the capabilities throughout the enterprise.

"The main driver for the mega trend for integrated communication over the network is the requirement for collaboration across many locations and within many different business units. This overall trend has been very for the past five years, but is still not fully implemented by most enterprises both within their own organizations and then with their extended suppliers and partners. By 2010, we believe that the penetration of this collaborative and open communication of ideas will have much deeper penetration within most enterprises, and as that occurs, the need for both infrastructure and the software to manage the communications will increase sharply.

"At an initial look, the valuation appears to be high, but once the subscription side of Webex’s business is factored into the mix, the valuation appears to be in line with what we would expect."