 |
Skyline Business School |
 |
|
Skyline Business School |
|
Issue:8
1. The BPO Backlash
(1) 'BPO ban won't bring back US jobs from India'
United States Federal Reserve Chairman Alan Greenspan on Friday said that a ban on
outsourcing to India, trade barriers or new protectionist measures won't bring back
American jobs. He did make a strong point by suggesting possible further job losses if
other countries were to retaliate with similar measures. He said erecting barriers to
foreign trade and discouraging innovation that brings about job displacement could somehow
temporarily ease tensions on the job market. However, he said, that kind of easing would
be short-lived and "our standard of living would soon begin to stagnate and perhaps
even decline as a consequence".
Source: IANS March 12th 2004
(2) Lawmakers ask Bush to shift stance on BPO
US senators have said that they will ask President Bush to repudiate the Council of
Economic Advisers' position that outsourcing of jobs to other countries was good for the
nation's economy and to amend the Economic Report of the President to reflect the change.
Lawmakers including Senator Hillary Clinton, Edward Kennedy, Charles Schumer and other
Democratic legislators wrote in a letter expressing their surprise on the tone of the
report and its conclusions. Attacking the statement of the Chairman of the White House
Council of Economic Advisers, Gregory Mankiw that 'outsourcing is just a new way of doing
international trade', the letter said alleged that Mankiw displayed a lack of sensitivity
to the millions of unemployed Americans, and that he fails to consider new and
extraordinary challenges facing US workers.
Source: Press Trust of India March 12th
2004
(3) BPO will give jobs to US: Vajpayee
Prime Minister Atal Bihari Vajpayee on Friday defended the trend of moving jobs
from the West to India, saying it would eventually create more employment in the United
States, not less. "Outsourcing makes businesses more competitive, increasing their
exports and their profits and placing more investment surpluses in their hands which can
be deployed to make more jobs,'' he said. On Tuesday, US trade representative Robert Zoellick said India has no right to oppose the US limits
because it has "one of the most closed economies in the world". Zoellick was
testifying before the US Senate Finance Committee. Vajpayee criticised such views over the
outsourcing issue. "The world has spent the last decade trying to make sensible
economics prevail over the temptation for short-term political gains,'' he said in a
speech to business leaders.
The very process of liberalisation, on which we have been lectured for so many years, has
created competitive skills which are available for utilisation by business everywhere,''
Vajpayee said. Outsourcing is a natural consequence of this process.''
Source: Associated Press March 12th 2004
(4) Offshoring Saga: India eyes Canada to avoid US heat
Under attack from anti-outsourcing groups for alleged infractions ranging from
stealing American jobs to avoiding paying US taxes, Indian IT companies such as TCS, Wipro
and Infosys have set up operations in Canada. Other Indian companies are expected to
follow suit. Infosys has been targeted by California lawmakers, as a company who is
stealing local jobs and taxpayers money.
Canada however, has been ready to charm Indian companies seeking relief from the ever-
increasing US bonhomie regarding offshoring. Welcoming the business prospect, a past
president of the Indo-Canada Chamber of Commerce has estimated needing 20-30 million
people in the next 20-30 years for its economic needs.
Source: The Times of India March 9th 2004
(5) Beating the BPO backlash: give US customer a choice!
In a pleasant twist to the outsourcing controversy, an American online lending
company E-loan Inc. has given customers the choice to call up either India or at home. The
warning: if they call in the US it will take upto 2 days to process their request, while a
call centre in India run by Wipro shall do it in the same day. With the movement of jobs
abroad, companies are increasingly trying to avoid the backlash, E-loan letting customers
decide whether to opt for the advantages the have to offer. Since the company offered this
service four weeks back, 86 percent of its customers have opted for the Indian route.
Source: The Hindu Business Line March 10th
2004 and the Asian Wall Street Journal March 9th 2004
2. Indian BPO: Shining…
(1) Customer First opens BPO outfit in Chennai
BPO service provider for the domestic market, Customer First Services has opened a
contact center in Chennai. A 100-seater facility, the center is poised to offer services
such as Business Process Outsourcing (BPO), Voice based customer care and Web based
customer care. Sandip Sen, CEO, Customer First, said "Customer First's strategic
decision to open this new facility, is based on growth in customer demand. Looking at the
rapid growth and opportunities in this region, we concluded that expansion is the best
solution to meet the growing demand for customer care services. With the domestic market
projected to touch Rs12,000 crores in the next five years, Customer First is gearing to
cater to the demands. It is currently one of the largest contact centers for the domestic
market whose clients include Hutch, Wipro, BPL, American Express and Standard Chartered
Bank.
The domestic BPO Company has its headquarters in Bangalore operations in Hyderabad,
Kolkata, Chennai, Pune and Coimbatore. It has more than 30 clients in various industry
verticals like Telecom, Financial Institutions, Banks, Insurance, Tourism, Consumer
durables etc.
Source: www.ciol.com
March 10th 2004
(2) US BPO firm plans big expansion in India
CBay plans to ramp up its Indian operations to 10,000
associates by 2005 in a way of inorganic growth with $10 million in its kitty.
US based third party BPO service provider for the healthcare sector, CBay Systems is
planning a major ramp up in its Indian operations within the next two years, with an investment of $10 million. Presently housing 1200 employees in
India, the medical transcription and information services provider plans to have a total
number of 5000 people working for them in centers at Bangalore and Mumbai. Plans of
scaling it up to a headcount of 10,000 by the end of 2005 are also on the cards. Its
Bangalore facility currently holds 150 employees and a new facility is under construction
to meet the additional requirements. The company's expansion plans also include
acquisitions in India and abroad, for which negotiations are underway. It is also
contemplating a complete take over of Arrendale Associates, of which it currently owns 22
per cent. Having already accumulated funds of about $20 million from investors, Cbay aims
to gather an amount of $25 million to $150 million in the next eighteen months. The
company also announced the implementation of the Six Sigma training program for its teams,
due to start next week.
Source: www.ciol.com
March 11th 2004
(3) Indian firm wins US city deal
Despite anti-outsourcing bills Goldstone Technologies has
managed to win the Oakland city order with the first phase valued at $500,000
Goldstone Technologies Ltd has won a small contract from a city in California to migrate
financial applications to modern computer systems. The contract with the city of Oakland
comes amid a fierce debate in the United States about outsourcing contracts to Indian
companies and reports of proposed California state legislation to make it tougher for
certain work to be shipped abroad. However, the contract with Goldstone, based in
Secunderabad, will be handled out of its U.S. office and carried out on site. It involves
the migration of applications running on aging IBM computers to applications running on
Sun Microsystems servers compliant with Sun's J2EE platform, according to a statement to
the Bombay Stock Exchange (BSE)
Source: www.ciol.com
March 12th 2004
3. Comments, Analyses, Studies etc.
(1) Reducing costs through supply chain outsourcing
According to Gartner's 2003 CIO Agenda Survey, one of the top
two management priorities for CIOs is to 'demonstrate the business value of IT'.
As today's supply chain environments become increasingly complex, IT staff spends more
time simply managing the IT infrastructure than focusing on supporting the core business.
Nearly 80 percent of the IT budget is spent in keeping existing systems functional. IT
departments spend more money trying to achieve consistently high levels of software
performance and availability when that capability is kept in-house. However, there are
ways to minimize the management of supply chain software while simultaneously eliminating
faults in the technology, cutting costs and protecting reputation. One approach is to
outsource the management of software applications. Not only does it reduce total cost of
ownership, free up IT staff to work on more strategic tasks and improve the quality of
service to users, but it also leads to better processes for key areas of systems support
such as disaster recovery and system availability.
According to IDC Research, outsourcing IT can save up to 66 percent
(The Financial Returns of Software as a Service, IDC, 2002) in hardware and support costs,
while The Standish Group, a leading international market research firm, found that Oracle
Outsourcing customers saved 49 percent by outsourcing their supply chain applications
management (The ROI of ASPs: Examining Oracle Outsourcing).
Source: www.ameinfo.com
March 12th 2004
(2) Are call centers doomed to an early death?
It started out as yet another weapon in the anti-BPO armoury, but suddenly it's
threatening the very existence of call centers. It's called Web-based
self-service - and it's something that customers have done made use of many, many
times. The idea is that customers will no longer pick up the phone to ask a human being at
the other end why their credit card isn't being honored, or why the software won't do what
it's supposed to, or any of those hundreds of questions that people always have about the
product or service they've bought. Instead, they will simply surf to the company's
website, click on the Customer Support link, and try to find out the answer to their
problems. By logical extension, that will mean a lot fewer jobs coming into India too. AMR Research, predicts that, in the next six years, B2B
companies will slash their call centre operations by half, moving instead to Web-based
self-help. According to research that it has done for a report, 43 per cent of the
companies surveyed said they already used Web-based self-service for customers, with
another 15 per cent planning to join in before August this year.
For companies struggling to combat poor public opinion about outsourcing jobs to companies
like India, Web-based self-service could offer a way to keep costs down without risking
customer wrath. Sure, a Website isn't the same as creating jobs in your own country, but
at least it prevents jobs from being created in other countries. Is
this the beginning of the end for call centers, then? Well, that's unlikely. For
one thing, there will still be problems too complex to be predicted and thus answered
through information already available on a Website. More important, though, is the fact
that many experts feel there's no substituting the live human voice - even with an
interactive voice response system.
Source: www.economictimes.com March 8th 2004
(3) The offshore services opportunity
With the outsourcing industry booming, a natural consequence is for new entrants to
provide offshore services. To set up an offshore service corporation, offshore advisory services are required. Offshore advisors
represent buyers in a sourcing transaction and focus exclusively on assisting companies in
maximising returns from offshore outsourcing of both IT and business processes on a
project or enterprise wide basis. Their solutions deliver results in the form of cost
savings, improved governance, reductions in sourcing process time and decreased risks with
offshore supplier partnerships.
The advisors/consultants go through the entire organisation flow, analyse what should be
offshored, what process should not be disturbed; providing support in strategy
formulation, external and internal risk environment, analysis of IT application portfolio
and then suggest whether the organisation should go in for a captive offshore unit or a
third-party service provider or a mix of the two.
Once offshoring is in place, the next vital step is to ensure a smooth transition: transition modelling, benchmark audits, budget cycles,
analysing resource constraints, understanding and streamlining organisational processes.
Small aberrations in transition can result in large costs and organisational discord.
Source: Business Standard March 9th 2004
Prepared by - Abhimanyu Puri,
BBA-MAHE-LEVEL1
Comments and questions: info@skylinecollege.com
URL: http://www.skylinecollege.com
