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.

IBG evokes UK to outsource to India

Indian IT and service providing companies are suggesting the UK government to access the economical business services from India in order to cope with growing economical pressure. Indian Business Group [IBG] – representative of 100 IT companies in UK is suggesting outsourcing to India to survive in the global competition. Prudential ICICI, British Airways, Thomas Cook along with other UK companies have already begun outsourcing to India in wake of cost-saving strategy.

Outsourcing business to India has grown steady as the offshore continues in large scale. The mass exodus by American firms to outsource business to cheaper countries, like India will be unhindered as the international competition tightens up. In a recent research by a firm in US - the shift-over of firms from America will continue despite of outcries and bills introduction. Outsourcing to India is understood to be a positive measure under the recent corporate trends emerging.

Clariant AG to outsource from India

As the horizons of outsourcing sector in India widens up several newer players are enthusiastically seeking opportunities to outsource in India. Swiss major Clariant AG, has identified Clariant (India) among its global outsourcing hub for raw materials, dye-stuffs and specialty chemicals.

In report published in Business Standard –MD of Clariant India, Prakash Rastogi said, “Clariant India is one of the three global outsourcing hubs identified by the group. The hub model of the parent organization was designed keeping in mind the specific competitive advantages of each of these countries.”

Clariant AG has over 100 group companies worldwide and it is worlds second largest specialty chemical producer.

NEWS SNIPPETS (The outsourcing buzz around – What the industry says?)

# Toyota Kirloskar Motor - the Japanese automaker will be investing $4.8 billion to set up a 100 per cent export oriented transmission unit, in its auto component parts unit near its plant at Bidadi in India, by June, 2004. The move comes in wake of strengthening the outsourcing capacity from India.

# According to the study, the U.S. economy enjoys at least two-thirds of the benefit from offshore outsourcing, compared with the remaining third absorbed by the country receiving the job. India is one of several countries benefiting from offshore outsourcing. But unlike most nations, it boasts what many consider a preeminent school for future technology workers. The Indian Institute of Technology, Kharagpur, is a virtual incubator for tomorrow's erudite engineer. News courtesy Plano Star Courier

Volvo turns to India for outsourcing

AB Volvo the Swedish automaker – one of the leading suppliers of commercial transport vehicles is looking towards India to outsource components for its manufacturing facilities in Europe and America. Ulf Nordqvist, managing director of the Indian subsidiary Volvo India says, "we have already set up a dedicated source for outsourcing forged components, cast parts and sheet metal segments for trucks”. Top European and US companies gradually eye outsourcing to India as a measure to reduce costs of operations. Volvo has already instigated a source for outsourcing forged components, cast parts and sheet metal segments for trucks.

Outsourcing to India has been on the steady rise. Volvo India has sold close to 600 in the Indian domestic market for a turnover of close to $61 million. Volvo is also seeking to outsource Information Technology (IT) requirements from Indian shores.

Bharti Teletech planning to venture into outsourcing

With the on-rise of outsourcing to India – Bharti Teletech is looking to venture into outsourcing. This move by Bharti Teletech – the manufacturing arm of India's leading private integrated telecom company Bharati Enterprises – comes in wake of the stoppage of production and outsourcing from China by telephone companies. Bharti Teletech is trying to capitalize over it.

CEO Pawan Kapur says here "we are looking at the export market where we are competing with China and efforts are on to tap the outsourcing market". Bharti plans to start outsourcing from April 2004 and export one million phones in the year. Outsourcing to India has grown manifolds due to its strong IT infrastructure and low labor costs.

LogicaCMG to increase staff by almost 400%

LogicaCMG offering services like management and IT consultancy, systems development and integration as well as outsourced management of targeted business processes is enhancing its manpower in India to almost 400% within next one and half years. The move comes in wake of growing Indian outsourcing industry. LogicaCMG recently bagged outsourcing contracts from a top FI in Holland as well as from major PSU from Britain. The hiring spree by LogicaCMG indicates the massive growth through outsourcing to India by companies from US and the European corporate sector. In a report issued by news agency PTI besides outsourcing of software work from India, LogicaCMG has expanding into new territories that includes South Asian countries like Sri Lanka, Bhutan, Bangladesh and Pakistan.

Outsourcing to India will grow: OVUM

European analyst and consulting firm OVUM has reported that India is likely to sustain and grow as a favored offshore outsourcing destination. The current trend (of offshore outsourcing) – Ovum says – is simply based on reduced manpower cost and IT firms across US are enthusiastically approving the concept. Outsourcing to India has shown mammoth growth for sometime now. Even the ruling GOP (Grand Old Party) – Republican has instigated a call-center in India in order to elevate funds for the party campaign in the forthcoming general elections.

Outsourcing to India is simply buoyed due to some peculiar reasons. The cost benefit that India provides is no more a point of discussion. The sine-qua-non is that India not only provides quality-driven services but the growth is also because of its strong IT impact. Ovum also points the repercussion in US against outsourcing of IT jobs to India. Instead of accepting the Indian strength in outsourcing sector – people are cribbing over Indian economy. Though it propels little change for Indian outsourcing industry.

Forbes: India is best for outsourcing

A study by business magazine FORBES has revealed that India remains as the most preferred destination for outsourcing due to the corporate and economical structure – that India enjoys. A study was conducted amongst the offshore outsourcing destinations like India, China, Russia, the Philippines, Canada, Mexico and Ireland. Outsourcing to India holds the advantage due to low wage structure, good English speaking populace and strong IT culture.

Outsourcing to India – Forbes said – will constitute business process services like accounts, inventories, call centers and data analysis. India’s friendly IT strategies and committed workforce put India above rests as the top-notch outsourcing center on the global corporate map.

Forbes: India is best for outsourcing

A study by business magazine FORBES has revealed that India remains as the most preferred destination for outsourcing due to the corporate and economical structure – that India enjoys. A study was conducted amongst the offshore outsourcing destinations like India, China, Russia, the Philippines, Canada, Mexico and Ireland. Outsourcing to India holds the advantage due to low wage structure, good English speaking populace and strong IT culture.

Outsourcing to India – Forbes said – will constitute business process services like accounts, inventories, call centers and data analysis. India’s friendly IT strategies and committed workforce put India above rests as the top-notch outsourcing center on the global corporate map.

Unisys steps up to outsource from India

US based IT service and solution provider Unisys – also into system integration and financial services is considering to tender some of its outsourcing work to India. This may include application maintenance alongside IT outsourcing. Olivier Houri GM for Global Transport for Unisys acclaimed that India is becoming quite tactical to the company and that Unisys is assessing its corporate building for outsourcing to India. Though he claimed that it is premature to disclose the details.

Houri added that a lot of R&D work of the company is been outsourced to some Indian partners. As such outsourcing to India by Unisys is high on cards. Unisys - he said - plans to loom other BPO players to bid IT services to them along with consulting and outsourcing services. There is little doubt over the eagerness of Unisys plans to lend outsourcing to India as the country is offering cost-oriented, quality-driven services to major clientele from US.

Outsourcing becoming grim necessity

I have mentioned somewhere earlier that outsourcing is no more a corporate obligation but turning out to be stipulation for giant US and European corporate market. Outsourcing to India while on a rise have broadened the issue and embarked that it is turning out be utter requirement. In one of the conference Wipro chief Azim Premji stated, “The truth is that outsourcing is no longer a choice but an absolute strategic necessity". It is evaluated that US corporate market is too huge to rely within for outsourcing.

At the time when we are discussing the impact of outsourcing on the European and US corporate sector – outsourcing to India is growing wide horizons. As India offers the most reliable and cost-effective IT services – unless discussed – outsourcing to India will dominate the offshoring sector for many years to come.

24/7 Customers on the verge of doubling up its staff

The growth for outsourcing to India is on rise and there is a severe demand for professionals – whether with experience or fresh faces. 24/7 Customer – offering outsourcing services with a huge client base will double up its staff by December this year to 3,000 people. "We have increased our hiring targets to take advantage of an increase in business," human resources chief at the Bangalore-based 24/7 Customer Pvt. Ltd, GV Giridhar said on Tuesday. 24/7 is also venturing an outsourcing facility center in Hyderabad.

Outsourcing to India has seen tremendous and today rakes at about $2 billion in total. There are more than 150 companies offering BPO and related services to the clients majorly from the US and UK. Over the years outsourcing to India has grown manifolds. India is the outsourcing base for major global giants with likes of DELL, GE Capitals, Oracle and Microsoft to name a few. Indian outsourcing industry that accumulated $712 billions in 2000 is heading for $1.2 trillion worth business market by 2006 – according to NASSCOM.

Probe, anger against outsourcing to India

One of the key factors behind the exceptional growth for outsourcing industry in India is the exemplary set up of the IT structure. As a developing country India had more than enough to emerge as a major IT and related service provider over last few years. While outsourcing to India is rising beyond imagination there are some other issues - emerging from the front door. Recently Michigan became the sixth US state where a bill was introduced at the judicial court to declare a ban on outsourcing offshore.

Bill to impose ban on outsourcing especially to India was already on air. In the wake of the continual job diminishing now UK has some issues to handle. A committee of House of Commons in Britain will be making an enquiry about the issue. UK has also faced the severe job migration from the country to India. "We will be raising the issue of the removal of UK jobs to call centers to places like India," Martin O’Neill, Chairman of the Commons Trade and Industry Select Committee, said the other day. Outsourcing to India on the other hand is on a roll. India is already a favored offshore destination for outsourcing services with major investment coming from United States.

Majority of Fortune-500 firms are outsourcing from India

While several forms of services are been outsourced elsewhere to keep away the massive workload – India as an offshore location is doing just everything right to emerge as offshore BPO service provider. Outsourcing to India is on a random growth. Economic expert suggests India as the outsourcing option for cost effective services. Analysis also suggests that outsourcing business to India saves as much as 40-70%. A list of top global corporate firms have their outsourcing center in India – which include GE Capitals, Oracle, Microsoft, DELL, American Express Bank, Phillips etc. The list is virtually very long to be mentioned.

Almost two-third of Fortune-500 firms are outsourcing to India. These companies are enjoying a massive cut on application development and maintenance costs while enabling to accrue quality services. Reports by Forrester Research points out that amount of work and in research and logistics would double up in 2003. The Indian IT industry is already a major outsourcing agent for numerous silicon-valley firms.