Rediff.com  » Business » BPO controversy brings more biz to India

BPO controversy brings more biz to India

Source: PTI
June 29, 2004 11:05 IST
Get Rediff News in your Inbox:

The controversy in the United States over outsourcing work in India has led to more business for the country from America and elsewhere as it has highlighted its low cost and expertise, media reports said.

In the high-technology hub of Bangalore two to three Western companies are opening operations every week. More companies are turning to India to do everything from software development to back office work, The Wall Street Journal reports quoting officials at the Software Technology Parks of India.

Revenues for call centre businesses grew by 46 per cent to nearly $4 billion during the year ended March 31. And the number of workers in India's technology sector is projected to have jumped by 23 per cent to more than 800,000 in the period, according to the National Association of Software and Service Companies.

Nasscom expects India's exports of software and services to jump more than 30 per cent to $16 billion in the current year ending next March, about the same growth rate as last year.

About the controversy in the US, Vikram Talwar, chief executive officer of Exiservice Inc, a New York-based company that processes financial claims for US banks and insurance companies in India, said: "During the last six to nine months, we have received millions of dollars of free advertising."

Companies like Accenture Ltd, Unisys Corp, Triology Inc and Google Ltd are significantly expanding back office, call centre and research and development operations in India.

Accenture is more than doubling its Indian work force to 10,000 people by the end of the year, the company said, dividing the staff between the Indian cities of Bangalore, Hyderabad and Mumbai. Accenture officials say the workers will support the company's consulting business and its back office operations and provide technical support to clients.

The company stresses that most of the jobs in India are new rather than head-count transfers from the US or other countries. Even as it expands in India, Accenture plans to add 8,000 employees in the US this year and 11,000 in Europe.

Recent reports in the US, the Journal pointed out, have argued that the number of jobs being lost to new operations abroad is relatively small. A US Labour Department survey released this month said that 4,633 jobs were moved overseas in the first three months of the year. The number represents less than 2 per cent of the total 239,361 layoffs for the quarter.

There are signs, said the paper, that the outsourcing trend is broadening. The US companies continue to make roughly 80 per cent of the companies outsourcing work to India, but now Chinese, Japanese and a number of European firms are opening offices in Bangalore and other cities.

Companies like Chinese telecommunications equipment maker Huawei Technologies Co. and Switzerland's STMicroelectronics NV are using India's English-speaking engineers and designers to expand into new markets and create new products. And a growing number of smaller companies are beginning to outsource work to India, the Journal said.

While many Indian software firms started by offering basic software code-writing skills, they are now doing research and development for semiconductor makers like Intel Corp and hardware producers like GE Medical Systems.

Geneva-based chip-maker STMicroelectronics has had operations in India since 1987, but for the first years largely just used its Indian engineers for software development, the company said. Today, STMicroelectronics has 1,500 workers engaged in chip design and research for developing wireless technologies, it said.

The company expects to increase its Indian staff to 3,000 during the next few years with its research centre near New Delhi becoming a central cog in its global business model.

STMicroelectronics' India offices have produced more than 100 patents in the last three years.

India, the paper points out, produces 300,000 engineers a year and local colleges train millions of English-speaking graduates. But one in six call centre workers usually quits his or her job within one year, according to industry executives. Qualified staff is also susceptible to being poached by higher-paying rivals.

Get Rediff News in your Inbox:
Source: PTI© Copyright 2022 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.
 

Moneywiz Live!