More takes on outsourcing

With recent announcements that Boeing and AT&T Wireless are both looking at sending jobs overseas -- to Japan and India, respectively -- the issue of offshore outsourcing is in the headlines again.

Seattle Weekly looks at how the news is energizing local labor groups, and rattling the world-view of "elite," high-tech workers who once imagined that they were safe from such concerns.

It's all part of a growing backlash against outsourcing -- which may be causing some employers to rethink the matter. News.com reports that the state of Indiana canceled a software contract with an Indian company in an explicit bid to protect local jobs. And Dell decided to stop sending support calls from corporate customers to a help desk operation in India after some customers complained, according to the Austin American-Statesman.

Meanwhile, experts are noting that the actual savings of offshoring high-tech jobs may not be as great as advertised, the San Francisco Chronicle reported. There are other costs involved and, as an inevitable side effect of the demand, salaries in the Indian tech center of Bangalore are rising 20 to 25 percent a year.

Dell Affirms Commitment to India

In response to recent complaints about customer service calls, Dell Computer (Quote, Chart) is bringing some of its overseas business customer service back to the U.S., but stressed that it remains committed to its call centers in India.

Published reports said Dell would be moving some of its business customer service calls from its technical support center in Bangalore, India to facilities in the U.S. But Barry French, director of public affairs for Dell Computer, said reports that the company is moving all of its call centers out of India are "completely false."

"We remain committed to India and we constantly make changes to optimize our operations in order to give customers the best possible experience," French told internetnews.com.

The shift comes as lawmakers and IT workers alike grow increasingly concerned about the spread of IT jobs to overseas markets, along with many call center functions.

Even India's Business Standard on Tuesday reported on Tuesday that India's IT and communications minister Arun Shourie said the emerging backlash in the U.S. against outsourcing to India is a "cause of concern."

Reports said customers calling Dell's customer care centers with questions regarding its Optiplex desktops and Latitude notebook personal computers would now be handled by representatives located in Texas, Idaho and Tennessee.

French declined to comment on which call centers support which of its computer customers. He said Dell is only shifting some of its commercial customers to the U.S. technical support services. "We're not making any reductions in the size of our India operations," French said.

Dell's decision to shift some of its business customers to U.S. call centers is part of the company's ongoing assessment of improving its customer service, and not a sign it isn't supportive of its extensive operations in India. Dell's Bangalore and Hyderabad facilities employ close to 3,000 people.

Many companies have set up call centers and other outsourcing operations in India over the past few years in a drive to generate cost savings.

"We do hear from our customers about their concerns and since we have a direct relationship with them, we're always trying to understand root causes of issues in order to provide the best customer experience possible," French said.

While setting up call centers and outsourcing operations offshore can save companies in labor costs, sometimes language problems and other training issues can complicate the level of offshore customer service.

French would not comment on any specific customer complaints about the company's call centers in India.

It is unclear exactly how much money Dell has saved by setting up customer call centers in India, and other countries around the world. But the company's decision to bring some of its call center operations for its business customers back to the United States, points to the importance the company assigns its enterprise strategy.

Forrester Research predicts that over the next fifteen years, 3.3 million U.S. service-industry jobs and $136 billion in annual wages will move to India, the Philippines, China, Malaysia and other countries with skilled labor and lower wages than U.S.-based jobs.

British minister supports outsourcing to India

British Trade and Industry Secretary Patricia Hewitt has supported companies that outsource work to India and rejected demands by unions that the government step in to stop jobs moving overseas.

Hewitt has rejected calls for the government to pass new laws or change rules to discriminate against British companies setting up call centres in India.

Speaking at the national conference of the Confederation of British Industry (CBI) , Hewitt, who is an MP from Leicester, said: "It is much easier to see the short term benefits of protectionism than to see the long term costs to consumers and business competitiveness." ( Can the Indian BPO industry survive the backlash brewing in the West? )

She said outsourcing was helping boost economic growth in India , which had half of the world's poor.

"We cannot preach liberalization to the rest of the world and practise protectionism at home", she said.

UK trade unions to protest against outsourcing

staggering two lakh in coming years as a result of 'outsourcing' by big companies in London, a direct beneficiary being call centres in India, Britain's trade unions are gearing up for a spate of countrywide protests.

Drastic cut in costs in the range of 30 to 70 per cent, a better quality in services and stiff competition are pushing more and more companies to establish their call centres in India. "When people lose jobs, you will find them protesting. This is a normal process inherited from globalisation," says noted industrialist Lord Swraj Paul.

Observing that the government was not directly involved in this, he said in all probability, the situation would work itself out. "It evolves around more and more competition. The sooner this sinks in, the better it will be for the affected companies," he said. But this view is not shared by others. "The unions are loud about the problem of outsourcing. It is becoming one of the biggest issues," Robert Blackhurst, Editor-in-Chief at the Foreign Policy Centre, told a group of visiting Indian journalists.

HSBC has already spoken about plans to employ 8,000 people in India, China and Malaysia in the coming few months. Telecom giant BT is contemplating creating 2,200 new call centre posts in India and insurance company Aviva proposes to set up a 1000-strong call centre and claims-processing unit in India.

IT Outsourcing to India irreversible

There would be a political backlash in the US against outsourcing IT work to India during the elections in the US next year but the fundamental economic value of offshore outsourcing to American companies will allow the industry to continue to grow, a top US IT official said today.

Delivering the keynote address on 'India as a product destination' at the Product and Embedded Software Summit 2003, organised by NASSCOM at the ongoing Bangalore IT.COM, BMC Software President and CEO Bob Beauchamp said there would be a backlash due to political considerations in the US, where an economic rebound had not created jobs.

"But as studies have indicated that for every one dollar invested in India, the value derived by the US economy is between dollar 12 to 14," he said.

Beauchamp said the backlash could be arrested if there is awareness of the benefits from outsourcing, and eventually help create more jobs in North America.

Terming the shift of business and IT outsourcing to India as fundamental and irreversible, he said technology development in India is no longer a competitive advantage, and "it is a must have" which will help the Indian and global economy see dramatic improvement.

Citing various studies, he said, they indicated improvement of performance, besides cost savings for US firms from outsourcing to India.

He warned of more protectionist measures in 15 US states, which have not signed to the WTO, against Indian firms. (PTI)

Blair OK with outsourcing to India

British prime minister Tony Blair has hit back at his country's rising angst over the shift in high-level service sector and manufacturing jobs to India and China by offering an improve-or-lose mantra.

Rejecting criticism from 250 corporate bosses about the Sino-Indian impact on British business, Blair told the annual conference of the Confederation of Business Industry that it would have to accept competition.

“What I can't do is shield you from the world. The economy out there will be decided by knowledge, skills and education , by value-added goods and services,” he told his nation's biggest manufacturers.