Thursday, September 8, 2011

Chill Winds of competition:India’s outsourcing miracle feels the chill winds of competition

The industry’s two largest players, Tata Consultancy Services and Info-sys, suffer commencing trimming quarterly bonuses, according to research by HSBC.

Yogesh Aggarwal, an outsourcing professional at the bank, said the move was linked to a slowdown in revenues for the industry in India, which is struggling when of rising costs and a tendency with some intercontinental companies to move employ centres going back onshore.

“Hiring looks as if it's to hold slowed down and many of these companies are now making cautious,” Amneet Singh, an outsourcing expert at the Delhi-based consultancy Everest Group, said.

The slowdown in recruitment comes as many Indian technology firms are shifting this focus to speaking call centres outside India.

Aparup Sengupta, chief executive of Aegis, a Mumbai-based outsourcing company that employs 57,000 people worldwide, said that the inclination was being driven partly by inflating costs and partly by a feeling with many Western companies that the customers were better served by call centre staff a large amount of familiar with their own language and culture.

“Indians can speak good English but it’s much not easy for them to understand someone from, say, Scotland or Yorkshire. There can be misunderstandings, which can really damage their brand,” he said.

Aegis now employs only one third of its staff in India and is expanding in Latin America, Europe and Australia.

It just hired 400 workers for a new call centre in Costa Rica.

Wipro, another big Indian outsourcer, has opened call centres in Romania and China.

Several British-based companies, such as the UK operation of the Santander banking group, have moved such a necessity centres from India to Britain for similar reasons.

While India’s outsourcing industry is still growing, it is being undermined in one or two spots by fierce competition from supplementary countries, most prominently the Philippines, a former US colony that retains many American cultural values.

A recent survey by IBM at last found there were now more call centre staff there than in India.

The Contact Centre Association of the Philippines claims that 350,000 people are employed in the country, compared amongst India’s 330,000.

Last year, the business in the Philippines raked in regarding £6.5 billion ($9.8bn), with that figure projected to rise to £16.5bn by 2016.

India is presently the world leader in the wider market for outsourcing, which includes software development careers as decently as call centre work, but its lead is narrowing.

China’s IT outsourcing economy is inflating by 30 per cent a year against India’s 14 per cent, according to research from XMG Global, a Canadian ICT exploring firm.
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