Outsourcing to India

Global Outsourcing and consulting firms like IBM, EDS and Accenture will continue their presence in India, hence Outsourcing to India will increase. In fact Outsourcing to India is set to grow by a minimum 30 percent.

India will dominate the proceedings in the Outsourcing arena and continue to be the preferred destination for Outsourcing. Using India as an Outsourcing destination has quickly developed into an optimization strategy rather than a pure cost containment initiative due to the quality and productivity benefits being realized.

India will stay the best alternative for the North American firms during the year 2004, but Indian Outsourcing providers will keep developing facilities in other low-cost destinations like China and Eastern Europe, because they know that China's immense and inexpensive labour pool and government support for software exports, it will soon become a strong Outsourcing force in the near future.

The Outsourcing firms in India need to set quality benchmarks: NASSCOM

Outsourcing to India has been gaining heat at the global level. But some multinationals have complained in the recent past that, though Outsourcing to India has proved beneficial, the service standards have been constantly falling. In fact some of them like Lehmann Brothers and Dell have stopped Outsourcing to India, some of their processes and have moved back to US.

To take care of this very matter, NASSCOM has called on Outsourcing firms to follow some strict quality norms, so that the overseas clients Outsourcing to India won’t have any worries or anxiety about the quality of service provided in India. Because although there is a constant flow of Outsourcing work to India, but if the clients are consistently dissatisfied with the quality and the like, they might stay away from India.

The Outsourcing industry in India needs to create some benchmarks, and then follow the standards set religiously. But NASSCOM assured that these issues are minor, and can be easily rectified. And also that it is not that the whole Outsourcing industry is failing to follow standards, only a few Outsourcing firms in India are a bit callous, and will be taken care of.

Outsourcing to India: Seems to be the mantra the west wants to keep chanting

Every industry wants to resort to Outsourcing to India. There is no limit as to which industry would come next. Like the most recent example would be US based company, Global Brand Marketing inc., fashion footwear and apparel market leader, has decided that it will start Outsourcing to India, and it will go be in product Outsourcing sector.

The company sources said in a statement that it would soon start Outsourcing to India, its footwear and apparels, which would fulfill its global requirements. It has chosen Chennai in India as the location for Outsourcing.

The company before this move to Outsource from India, has already been Outsourcing from locations such as, China, Macau, Taiwan Korea, Vietnam and Italy. This project, just like the other Outsourcing to India projects, is sure to create substantial job potentials, giving employment opportunities to many.

Backlash against Outsourcing to India blown out of proportion

Minister Arun Shourie in a bid to take the edge off the backlash against Outsourcing to India in US and other countries said that such fears are uncalled for. India is far superior and has nothing to worry. The campaign that is on against Outsourcing to India is a very temporary thing and will surely subside, said the minister.

The Outsourcing to India backlash is a very minor thing. The kind of talent, skill and cost advantages that India offers make it absolutely necessary for US and other countries to Outsource to India. These multinationals have no other option then to Outsource to India, because otherwise they will lose their competitive advantage and become unprofitable. The constant pressure to reduce costs and boost the bottom line makes Outsourcing to India indispensable to the firms.

There is certainly an amount of truth about what the minister has said about the backlash against Outsourcing to India. Because it is to be noted that, in the 8 states where anti-Outsourcing bills have been proposed, the legislation has just been introduced and not passed. This is proof enough that Outsourcing to India is seen as a crucial thing. He mentioned that a high power Indian delegation will US and Europe to promote India as an Outsourcing destination and also try to soothen their bruised nerves a bit.

Good news for Outsourcing players in India

British Minister of State for Trade, Investment and Foreign Affairs, Mike O'Brien, told in an interview that although the backlash against Outsourcing to India is still on, Britain would not take any protectionist measure for its domestic industry. He said that it’s a free market economy and India is not the only one, which, benefits from Outsourcing, Britain is equally benefiting from Outsourcing to India too.

He also added that Outsourcing to India is not responsible for the job market in Britain, in fact employment rate is on an all time high in U.K. The most valid point he made though was, India has several Call Centers, so does Britain, and it was upon the industry to decide upon whose services they want to use.

He did admit that Outsourcing to countries like India and China etc, has benefited companies in generating new and substantial jobs. He was very upset the fact that newspapers write about the jobs being lost due to Outsourcing to India, but they say nothing about the number of jobs gained as a result of companies investing into Britain.

Even auto industry shows its interest in Outsourcing to India

Outsourcing India is to happen in a big way. The Outsourcing India will be in pharmaceuticals research, automobile manufacturing and what not. Every industry is looking forward to Outsource from India. Now two automobile giants are coming to India to look at Outsourcing automotive components.

Auto part giants $10 billion Textron Inc, which owns Bell Helicopter and Cessna Aircraft Inc, and $7.2 billion Eaton are sending Outsourcing delegations to India which will participate at Auto Expo 2004 this month. The Outsourcing delegations are here to participate in the Global Outsourcing Summit, being organized by Acma. Other large companies which are participating in the summit are Electrolux, which announced that it would Outsource Rs.1, 000cr worth of components from India and earthmover giant Caterpillar.

Textron will bring certain parts for display to the business visitors to check whether it can be Outsourced from India or not, Eaton will also weigh its options in Outsourcing from India. Electrolux which, already has Outsourced from India once, now wants to Outsource more.

In the year 2002, not even a single foreign company wanted to Outsource from India, but now things have changed. The scenario has also changed in the country’s auto part industry. It has proved itself on quality and delivery and hence thins interest from overseas regarding Outsourcing. With this we have opened our doors to global Outsourcing.

UK engulfed in an unemployment wave due to Outsourcing

UK is struggling with unemployment, and seems that it can’t do a thing about it. And Outsourcing of jobs to India is what is giving fuel to this state of unemployment. The job growth rate has been virtually been zero in the month of December. The main reasons cited for this current scenario are changes in technology, productivity growth and also Outsourcing of jobs overseas.

More jobs losses are forecasted in 2004 in UK. And so there seems to be no respite in the coming years too. A stunning 40 percent of the companies with more than $100 million in revenue will be trying out or using Outsourcing services by the end of this year. As many as 40,000 of IBM’s 160,000 US jobs will be transferred overseas by the year 2005. Which means that almost 3.3 million white-collar jobs will be lost to Offshore Outsourcing over the next decade, a half million of them will be in information technology (IT). Forrester predicts that the Indian IT services market will grow at least 30 percent in 2004. These are ominous signs for the employment market in UK.

At the rate at which companies have been Outsourcing, it is almost inevitable that millions will be stranded unemployed. So either they will have to change their career path or would have to start something of their own. Because companies will not stop Outsourcing, as they have to look to boost their profits too. Outsourcing is an extremely vital step to be taken to stay competitive in this rapidly changing marketplace. So why would companies think of chaning, when Outsourcing is benefitting them so well.

Outsourcing to India to become the hot topic of the coming elections in U.S

After turning the US job market upside down, now Outsourcing to India is to become a keenly debated issue this election in the U.S. As the elections near, the politicians are going hoarse over the issue of Outsourcing.Despite the apparent backlash, companies have not ceased Outsourcing to India as yet.

They continue to go about their business of Outsourcing to low cost countries, as it serves them well in saving valuable costs. All the efforts of the politicians to stop the Outsourcing to India trend have not succeeded so far and this has further hurt their ego.

Just before six months Outsourcing to India was not even an issue in the political circles, but now politicians are using the issue of Outsourcing, in fact over doing it, to bag votes from those who have been affected the most .

India a low-cost Outsourcing destination: Not that true

India has been beating the drums over being a low-cost Outsourcing destination, but that is not quite true. Because there are certain hidden costs embedded in the Outsourcing deals with . Many companies fall into the trap thinking that by Outsourcing to India they will be raking in some huge profits, but that is not often the case. In fact not only do they fail to achieve any cost reductions from their Outsourcing projects, they on the other hand experience an increase in costs.

The difference among the rates fixed for the employees is just phenomenal. Where an IT worker in Britain charges ₤100 an hour, an IT worker on the other hand charges a laughable amount of ₤20 an hour. But the savings on Outsourcing don't add to the profit line much, thanks to huge upfront investment costs and years of fine-tuning.

But if you take out these costs, then India is surely an attractive Outsourcing destination, which has an abundance of English speaking young people, are computer savvy, offer quality of service and at rates that are cheaper than abroad, and also easy adaptibity and flexibility, make it a superb Outsourcing decision.

Cyberabad outraces Bangalore: emerges as the new Outsourcing destination

As the topic, Outsourcing to India catches more and more fire, there is a growing competition within Indian states themselves, as to which will become the preference of the multinationals. Hyderabad is slowly rising to the fore as a hip & happening Outsourcing hub. It has slowly edged Bangalore and become the preferred destination for call centers and Business Process Outsourcing.

London-based banking giant, Lloyds TSB, has announced that it would shut its Call Center in Newcastle and Outsource jobs to Hyderabad, despite having already established an Outsourcing unit at Bangalore. And indications are strong that rival bank Barclays may soon follow suit.

The motive for Outsourcing is of course cost cutting and it augurs well for the multinationals that the cost of living is the cheapest in Hyderabad. Even the Governments efforts in promoting Hyderabad, as a potent Outsourcing destination should be given a mention. This translates to better infrastructure, 25 percent subsidy on power tariff apart from subsidies on land and investment. A governmental organization, the STPI (Software Technology Park Of India) is where Call Centers and Outsourcing projects come for registration.

Let the Outsourcing be anywhere in India, the main thing is it is in India and as far as the Outsourcing is done in India, nobody should have a problem with that.

Product development is the future, NASSCOM tells Indian outsourcing firms

If the Indian outsourcing firms want to rake in more moolah then collaborative product development is the way to go, which is fast emerging as a money-spinner, according to a report by NASSCOM. And so Indian outsourcing firms must embark on product development and high-end research activities and explore this yet unexplored area of work.

The success of collaborative engineering practices between domestic and offshore partners, to compress product development time reduce costs by leveraging available resources worldwide, are being examined closely by global customers, it said. It also added that massive monetary and efficiency gains are possible through this means, provided manufacturers choose relevant off-shoring partners.

India's vast pool of English-speaking and cheap manpower, educational system and training programmes have made it possible for the to become a global outsourcing superpower. Many multinational giants prefer India for their outsourcing jobs. In fact more than a quarter of Fortune 500 companies like General Electric, American Express, British Airways, HSBC and Citibank are shifting their back office operations to India.

Collaborative product development can help firms shorten time to market due to the offshore product developers' ability to reduce the number of errors, help clients manage utilization and reuse design work or parts and shorten review cycles, manage, control and facilitate alliance on product designs and data from the conception of a new product idea to the point when the product is handed off from engineering to manufacturing, etc. It will be a strategically good move for India to cash in on this opportunity, because the product and technology services' segment is set to grow phenomenally in the next five years to achieve revenues to the tune of $ 8-11 billion by end of 2008. So this field can provide extra earnings apart from the usual outsourcing. If the Indian outsourcing firms are able to that, then their revenues could just shoot up like anything.

Backlash against outsourcing

Although India strongly feels that there is a strong backlash against outsourcing to India, U.S. experts feel that India is reading too much in to it and shouldn't worry about it. The two American experts who attended the ITES-BPO summit surely felt so.

Michel Janssen, president, supplier solutions, Everest group, said that, " this backlash against India is not all new to the business he is in, but yes India may be facing such a problem for the first time. But it is an issue, which has been blown out of proportion by the Indian media".

Kevin M Campbell, president and chief operating officer of Exult, also expresses similar sentiments. He said that, there is no need to talk on this issue again and again; just let it go and the issue will pass away without much fuss. The news abroad is that the firms have stopped discussing about the issue of outsourcing.

This fact was emphasized by Intel chief executive officer Paul Otellini, who on a recent visit refused to comment on the issue of outsourcing design and development work being transferred to India. Instead he said it would be development work done together.

One interesting fact that one needs to note down is that if at all a legislation is passed in the U.S., regarding the blockage of outsourcing work to India, it will only stop the government outsourcing which accounts for less than 1 percent of the total revenue that India earns through global outsourcing. The legislation cannot stop the private players from outsourcing

There are no prizes for guessing that U.S. corporations see outsourcing as a tool to stay on top and remain competitive, and they sure will lobby for it by themselves because it an advantage to them. And it's not that it is not benefiting us, and so it is asge to say that it is a mutual admiration society.

Outsourcing: to do it or not

Suddenly outsourcing is the in thing. The year 2003 was a great year for the IT industry and the 2004 promises to be even bigger. The pressure to stay ahead of competition and the need to cut costs has forced multinationals to look at outsourcing. It is unbelievable to actually know how many millions of job opportunities it has created. It has become a viable career opportunity to many of the young college graduates, for whom it becomes their first job.

The job pays well but it is extremely demanding and monotonous. The salary ranges anything between 7.5 - 10,000, but its 24*7 work environment takes a lot out of the employees. But yes the one thing that is tremendous is the employment avenue it has created. So many young graduates work in call center these days under different capacities, voice/non-voice, technical, and transaction etc.

Why multinationals outsource to India is no big secret. The one major benefit is of course the cost advantage that India provides. Our employees work at almost a fraction of what the employees abroad charge. The second benefit is the huge and abundant workforce which is English speaking, computer savvy and are willing to put in 8 hours of strenuous work, in the process, completely abandoning their social life.

Outsourcing is a very beneficial option for the multinationals, as that allows them to concentrate on their core processes and outsource the rest of the processes, which are not the main areas of their strength.