Posted on 01/19/2003 11:54:00 AM PST by Willie Green
For education and discussion only. Not for commercial use.
Bangalore: Outsourcing, the bedrock of Indian success in information technology — especially the much-hyped BPO segment, could trigger a backlash in the US as the downturn in the economy has increased the unemployment rate in that country. The warning of a possible backlash in the US was given by US-based Wipro Limited vice chairman and president of Wipro Technologies Vivek Paul. Mr Paul also provided a possible remedy to salvage the situation; do business in the silent mode. And, whatever you do, don´t brag about business that you have bagged!
Speaking with journalists here after the company announced its third quarter results, Mr Paul said: “There is a strong backlash in the US about jobs moving to India”. Mr Paul said the situation could be aggravated further in the next six months. However, Mr Paul made it clear that the ire of US blue collar workers directed at Indians cornering call centre jobs, would not make any impact on the business or the outsourcing model. In a globalised economy, restrictive practices may not work and Indian industry should send the message across that the outsouring model was contributing to efficient use of resources in the overall context, he pointed out.
According to the Nasscom-McKinsey study 2002, the ITES sector exports from India is expected to touch $21-24 billion (Rs 1,00,080-1,15,200 crore) by 2008 from the current level of around Rs 6,000 crore.
In this connection Mr Paul drew a parallel with the Chinese manufacturing sector. “The Chinese displaced many jobs in the US manufacturing sector but that has not resulted in a situation that people boycotted the Chinese goods,” he said. However, Mr Paul advised the Indian the BPO sector to show more restraint in their claims about business deals or of potential deals to avoid unnecessary concern in the US. “The industry need to be circumspect on these matters”.
Mr Paul also mentioned a bill introduced by a member in the US state of New Jersey banning outsourcing of work funded by the state government to outside countries. But he said that the said bill had not been passed so far.
Mphasis BFL´s BPO MsourcE India CEO Milind Chalisgaonkar said: “We at MsourcE are very quiet on matters pertaining to business deals.” On asked whether it could become a matter of concern for the BPO companies, Mr Chalisgaonkar said “It is something we need to keep in mind.” But, he said that there was no indication of business being impacted on this score so far. In the ultimate analysis, business would be driven by “excellence in quality of services provided by us and thereby creating an exit barrier for the client”, he said.
Bangalore-based 24\7 Customer vice-president Hariharan felt that business had not been impacted on any kind of backlash syndrome. But he said that 24\7 had a “strong confidentiality clause with clients and we don´t go open about them”.
A senior official with city-based BPO firm Crossdomain said that “there is tendency of dragging of feet among some of the people with whom we are having discussions. May be this is caused by the fear of a backlash. But we are catering to the domestic market and have not been impacted in any way at the moment”, he said.
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