Fast-Growing Indian Analytics Sector Needs More Workers

February 28, 2007

Analytics is an emerging area in the Indian Knowledge Process Outsourcing (KPO) sector. While the overall KPO space is expected to grow at 50%, analytics could witness 70-80% growth, according to experts. However, this rapidly growing area is facing the same challenge as that of other IT/ITES related segments — finding the right qualified talent, especially in niche areas like financial analytics.

Training Recent Grads

The answer to this issue by most analytics companies has been to recruit IIT and IIM graduates who are considered to have good analytical aptitude and train them, though there are no specific analytical programmes in these institutes. However, with growing demand, companies are now expected to tie-up with foreign universities for niche executive programmes or organise in-house curricullum for training.

Joydeep Mukherjee, head of knowledge services practice, Infosys BPO said, “As the financial markets become more global and products become complex, investors and FIs will expect higher level of analysis of trends based on technical data. Growth will remain dependent on high-end competency. So, Infosys BPO is now planning to customise its training for analytics by building own curricullum. The training process will be for areas like financial/retail/ insurance analytics and is expected to roll out in the next 12-18 months.”

Wipro addresses the supply side with a campus hiring programme. “Once the candidate is hired, we have rigorous training schedule, domain specific training modules and on the job training,” says Ramit Sethi, senior vice president, Wipro BPO.

Growth Ahead

According to reports, the entire Indian KPO sector is expected to employ more than 2,50,000 KPO professionals by 2010, compared with the current figure of 25,000 employees and about 5,000 people in analytics. Foreign universities are now gearing up to meet this demand. UCLA Anderson School of Management plans to start a course in financial engineering management in the US from January 2008.

“We came to India to speak to other institutes about the new course. We realised that the demand is much more than the current supply. Our interaction with corporates told us that the need is to introduce a similar course in India. We may in the future introduce a 4 week intense version of the course in India,” said Judy D Olian, Dean and John E Anderson Chair in Management, UCLA Anderson School of Management.

Universities 21 (U-21) Global, a world-class online graduate school that offers management programmes with flexible duration also sees a huge demand for a similar course. “We allow students to choose their study hours. This flexibility allows people with work experience to enhance their skills,” said Jeremy Williams, director, pedagogy and assessment, U-21 Global.

Source : www.offshoringtimes.com

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Develop business skills to survive offshoring challenge, IT staff urged

UK IT professionals have been urged to develop business and management skills, following new indications that the rate of offshore outsourcing is increasing.

Computer Weekly revealed last week that the number of work permits issued to overseas IT workers had reached an all-time high of 32,251, up from 22,000 a year ago. A major driver for this was identified as offshore companies bringing their own staff to the UK to work on outsourcing contracts.

The trend has highlighted the need for UK IT professionals to develop management, communication and business-­focused skills, industry experts said this week.

“Those who are trying to compete on technical skills, where it is cheaper to train in India, are operating at a disadvantage,” said Philip Virgo, strategic adviser at the Institute for the Management of Information Systems.

Future generations of IT professionals will need to develop both business and technical skills, or have the capability to manage outsourcing contracts, if they are going to add value to employers, he said.

Elizabeth Sparrow, chair of the British Computer Society working party on offshoring, said IT professionals must face up to the changes that offshore outsourcing would bring.

“There are a lot of positive things we can do. The surveys we have done with employers consistently show that they want to employ more IT professionals in the UK. But they are looking for a different combination of skills than they have in the past,” she said.

“They want interpersonal skills, project management skills and relationship management skills. The ability to know how to source IT work, when to buy from overseas, and managing outsourcing agreements.”

Sparrow added that employers needed to be aware that they should train for longer-term skills, not just short-term technical skills.

Virgo also highlighted the importance of training and called on the government to offer tax breaks to businesses and individuals who invest in training.

The estimated 100,000 IT professionals in the UK working on large systems integration would be most affected by offshore outsourcing, said Virgo. However, offshoring would have relatively little impact in the City of London, aerospace and pharmaceuticals, he said.

Source : www.offshoringtimes.com

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Background checks in BPO firms

February 27, 2007

Before you get absorbed into a BPO firm today you might already have had a detective check out your precedents. They have little choice.

With the Indian software and information technology enabled services (ITES) exports heading towards $60 billion by 2010, it is becoming necessary for BPO firms to secure sensitive data and conduct background checks of potential employees.

Almost all the top BPO firms today rely on the services of forensic and fraud experts to conduct investigations and background checks on potential recruits.

Experts say since the BPO industry is gradually attaining maturity due to growth of business and transition of critical processes that demand utmost security for client-sensitive data, it has become very important to appease the client and help the industry attain the desired output.

‘Security awareness was always there but now that the industry is maturing, one needs to be more cautious,’ Kiran Karnik, president, National Association of Software and Service Companies (Nasscom), told IANS.

The BPO industry in India has received tremendous interest in the past several years due to its strategic socio-economic impact.

‘There was a case where an employee was electronically transferring data out of the company. We had to check his e-mails and interrogate his colleagues and after many such investigative procedures we finally managed to crack the case,’ said Sumit Makhija, associate director, dispute analysis and investigation services, PriceWaterHouseCoopers (PwC).

India’s considerable rise in the BPO space has been due to its skilled and low-cost manpower coupled with its English-speaking ability.

Last year, Britain’s popular Channel 4 carried out a sting operation that showed Indian call-centre employees selling client-confidential data for cash. This created a tremendous furore among the industry, making Nasscom send out reassuring statements in the media.

In another case, in July 2005, a reporter of one of Britain’s leading dailies, ‘The Sun’, managed to secure sensitive information from an employee of EDS (formerly Mphasis), a Delhi-based BPO.

The IT industry, despite its exponential growth, is also witnessing increasing cases of data theft, money laundering and leakage of confidential information about customers among others. The IT industry is growing at a rate of 31 percent in exports and employs over 1.6 million people annually. But the firms are gradually realising the disastrous impact of data theft and taking the required steps by hiring experts.

‘The whole issue of data security has heightened now. Today more and more IT/BPO companies are assigning us to investigate matters concerning fraudulent activities,’ said Deepankar Sanwalka, executive director, KPMG India.

‘With processes such as equity research gradually coming into India, this will require a level of preparedness on the part of the BPOs,’ Milan Sheth, associate director (outsourcing advisory centre), Ernst and Young, told IANS.

The specialised investigative teams, which consist of former Central Bureau of Investigation (CBJ) and Intelligence Bureau (IB) officials, are equipped with the most sophisticated technology and assigned by companies for a specific period to solve cases.

They carry out background checks on new recruits to prevent those with fake educational certificates from getting in. In some cases, they have even found the institutions named on the certificates to be non-existent.

‘There have been cases where people have produced fake certificates or scanned copies of false mark-sheets, etc.,’ said Yash Maroli, vice-president recruitment, EXL Service, one of the leading Noida-based BPO firms.

In order to conduct a background check, these experts contact the universities or colleges to verify the credentials of the applicants and in some cases even do referral check of their schools.

However, these are all done with the consent of the candidate concerned.

‘The volume of hiring in this sector is higher than in any other industry. And I believe these procedures make recruitment more organised, considering the quantum of business that comes in,’ Maroli said.

‘This is all about being ahead of the curve,’ said Karnik of Nasscom.

According to industry experts, the companies are gradually waking up to the need of compliance and security.

And, with Prime Minister Manmohan Singh setting a target of reaching $80 billion in exports by 2010 during a recent Nasscom summit, the industry is all geared up to face the challenge.

Source : www.offshoringtimes.com

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Report: Offshoring to Have No Sudden Bad Effects

While offshore outsourcing is expected to affect wages and employment in developing countries, it won’t have any sudden negative impact on developed countries’ economies, according to a report released Feb. 22 by the McKinsey Quarterly, the business journal of the global management-consulting firm McKinsey & Company.

The report “Sizing the Emerging Global Labor Market” attempts to find a middle ground between those who argue that nearly all service jobs will eventually move from developed countries to low-wage ones, and those who feel that rising wages in cities such as Bangladore and Prague indicate that supply of offshore talent is already running thin. It attributes these rifts to a confusion surrounding the relatively new global labor market.

In analyzing the potential availability of offshore talent in 28 low-wage nations as well as the likely demand for it in service jobs across eight of the develop world’s sectors–IT services, packaged software, retailing, financial services, health care, insurance and pharmaceuticals–the report found that these sectors provided about 23 percent of the nonagricultural jobs in developed country.

Demand for Offshore

The report estimates that 11 percent of these services jobs around the world could be carried out remotely. However, this number can be higher or lower depending on the sector.

The retailing sector, for example, with its large number of customer-facing jobs, only stands to be able to offshore 3 percent of its jobs by 2008, but being such a huge employer, this would be equivalent to 4.9 million positions. The packaged software industry, however, stands to remotely undertake almost half of its jobs in the same time frame, but being a smaller industry, this would be only 340,000 positions.

The engineering occupation was deemed the most amenable to remote employment (52 percent), followed by finance and accounting (31 percent). Generalist and support staff work were determined the least amenable (9 percent and 3 percent, respectively). Yet again, however, though a small percentage, the vast number of workers in this category across each industry brings the number of jobs to 26 million.

In practice, the report expects that just a small fraction of the jobs that can be offshored will be. While 565,000 service jobs in the eight sectors have been offshored to low-wage countries today, the number is expected to grow to 1.2 million by 2008.

Total offshore employment was at 1.5 million jobs in 2003 but is expected to grow to only 4.1 million in 2008, or just 1 percent of the total number of service jobs in developed countries.

Offshore Talent Supply

The report argues the developing countries produce far fewer graduates suitable for employment by multinational countries than the raw numbers suggest, though it is quickly growing. The report found 33 million experienced young professionals in developing countries, versus 15 million in developed nations, and 7.7 million in the United States alone. Language gaps, an emphasis on theory versus practical knowledge and a lack of cultural fit are considered hindrances to actually employing much of this offshore talent.

Market Limitations

Though the report finds that the potential supply of offshore talent suitable for employment exceeds the demand in the eight categories they analyzed, this view wrongly “creates an illusion of abundance,” since companies tend to hire offshore talent in locations where others have had success.

This can often create local supply and demand imbalances, wage inflation and raise levels of attrition among workers. The Czech Republic, India and Russia are given as examples, with bigger squeezes expected from Prague and Hyderabad by 2008.

Implications for Countries

The report advises companies that rather than being sidetracked by the absolute number of graduates in a given country to instead consider the supply of suitable labor and the demand for it.

On the flipside, it advises supply-side countries to improve the quality of their talent, and not just its quantity, and for their governments to reduce the number of bureaucratic hassles involved in created these relationships.

Source : www.offshoringtimes.com

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