Wednesday, July 14

The Outsourcing Roundup : Backlash & Knowledge

NYT reports the fading outsourcing backlash in US :
As Indian outsourcing companies grew fearful that negative publicity would harm business, Nasscom tried to protect themselves by campaigning for outsourcing with lawmakers, government officials and industry lobbies in the United States and Europe.

But in the last two months, analysts say the backlash issue seems to be fading in importance to the American public and to United States businesses.

"No longer are customers prefacing outsourcing questions with what they should do to deflect the backlash issue," said Partha Iyengar, research director for Gartner in Mumbai. Gartner nonetheless still recommends that its United States clients continue with employee-impact assessments and community audits before embarking on outsourcing.

Some experts said they expected the concerns to be replaced by more pressing matters, like the shortage of skilled labor.

"Most companies are expanding so rapidly," Mr. Mehta of Nasscom said, "that we fear the new threat for outsourcing is not the backlash but the imbalance in supply of skilled professionals."

The hostility against outsourcing may have inadvertently helped the industry, some experts suggested.

"The backlash proved a gold mine of free publicity for Indian outsourcing companies," Mr. Iyengar of Gartner said. "For many U.S. companies, the backlash made offshoring a compelling proposition."

Even smaller outsourcing companies, like iGate Global Solutions, based in Bangalore, reached some deals after the controversy. The company, with $125 million in annual revenues and 4,000 employees, has customers like General Electric, GreenPoint Financial and Kraft Foods.

"The backlash issue made outsourcing so mainstream that even my barber was speaking knowledgeably about outsourcing," said iGate's chief executive, Phaneesh Murthy, who is based in Fremont, Calif.

In political circuits too the voices we hear now are somewhat different as kerry accepting the outsourcing
"We recognise that outsourcing is a reality, but at the same time, we want to develop our jobs and industries more at home here too. But Senator Kerry is an internationalist and I think India should welcome him as an American President,” Richardson told reporters when asked about his party’s strident posture against outsourcing.

Even then people are not short of Myths and still more knowledge is required on this subject . Far from damaging the economy of the United States, offshoring should enable its companies to direct resources to next-generation technologies and ideas -- if public policy doesn't get in the way. - A report on