IT Outsourcing India

The Democratic presidential hopeful Barack Obama has held revolution in technology and communication in last few decades responsible for outsourcing of jobs to India and China.

"Over the last few decades, revolutions in technology and communication have made it so that corporations can send good jobs wherever there’s an Internet connection. Children here in Missouri aren’t just growing up competing for good jobs with children in California or Indiana, but with children in China and India as well," Senator Obama said at a campaign rally in Springfield, Missouri.

In a veiled attack on previous government for its decision on economic reforms, he said "it was irresponsible decisions that were made on Wall Street and in Washington. In the past few years, we have relearned the essential truth that in the long run, we cannot have a thriving Wall Street and a struggling Main Street."

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Pakistan is emerging as one of the major players in the global IT industry as a result of policy initiatives taken by the government to position the country as an offshore location of choice for IT services.

In terms of suitability for offshore outsourcing, Pakistan now ranks among 20 top countries of the world, recognised by the global community as ‘Market Leaders and Challengers’ and placed in the first category countries. Last year, Pakistan ranked in the third category amongst "Potential Players," occupying 30th position among the top 50 IT potential countries of the world.

In a recent analytical report, the world’s leading information technology research and advisory company, Gartner, has judged Pakistan to be a "competitive location in terms of cost, with salaries and infrastructure costing less than most offshore destinations." Based on a total of 10 criteria, viz. language, government support, labour pool, infrastructure, education system, cost, political and economic environment, cultural compatibility, global and legal maturity, data and intellectual property security and privacy, Gartner rated Pakistan ‘very good’ in cost, good in language and fair in all other areas, except assigning a poor rating in political and economic environment. But, the authorities maintain that the political risk of the country is often over-rated "" bellying the experience on the ground. However, brand perceptions abroad negatively impact the cost of manpower, the single largest cost in IT, which is about 30 per cent cheaper than neighbouring India.

The government has spent over $ 67 million in promoting the country’s software industry. "The Ministry of Information Technology has developed a comprehensive national IT policy, designed to make the government a facilitator in the encouragement of the private sector. To drive development, the government-owned PSEB (Pakistan Software Export Board) plans to construct new IT parks in major cities and approximately 750,000 square feet of space in PSEB-designated parks has already been leased to IT companies. The government is doing a good job of initiating activities in positioning Pakistan as an offshore location, however, it needs to take concrete steps to implement its plans and improve its brand image as an offshore destination."

With English as a widely spoken language in urban areas, Pakistan can also be leveraged for Arabic language support to Middle Eastern countries. Observing that IT revenue grew 59 per cent in 2006; Gartner report says that the country’s annual growth is expected to reach 69 per cent between 2009 and 2010. As far as the World Bank is concerned, it "ranked Pakistan 76th out of 178 countries for ease of doing business."

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Hawaii businesses are focusing more on money-generating activity

As the island economy has begun to falter, outsourcing is one aspect of the business community that is gearing up for a boom.

Although outsourcing has been a trend among Hawaii’s businesses since pre 9/11, it’s beginning to pick up steam. As the challenges to making money mount in Hawaii’s current economy, a growing number of Hawaii companies and small businesses have decided to outsource human resource functions or any other service that is not core to their product delivery.

In today’s economy, the only people who will make money in the next four years are the business owners that know how to run their business efficiently and with growth in mind, said Milan Yeager, chief executive of the National Association of Professional Employer Organizations.

"You will never save enough money to be profitable," Yeager said. "Businesses that want to succeed need to spend more time doing what they do best and making money at it."

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The $50-billion IT services industry is in for tough days. And this time, it’s not just a slowdown in spending that’s worrying, but increasing competition from multinational service providers who have ramped up significantly.

With a robust low-cost delivery model in place, MNC IT services companies like IBM, Accenture, HP-EDS and CSC have bagged quite a few new offshoring contracts in recent times. New IT deals offshored to India and other low-cost destinations from firms like United Healthcare, Universal Music Group, Hartford Insurance, Bristol Myers Smith, ICAP, BHP Billiton, Bombardier, P&G , Ericsson and Banco Fondo Comun (a Venezuela bank) have gone to MNCs. Incidentally, in many of these contracts—multi-year $50-500-million deals—Indian IT and BPO companies were already providing services for the clients. And in most cases, MNCs bagged the new offshored work beating Indian service providers.

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