In with the Outsourcing Crowd: Learning from Nasscom

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an empty call centre in Florida ... did all the jobs leave to India?The Nasscom India Leadership Forum in Mumbai is the annual meeting platform at which senior representatives from firms in the Indian software and Indian BPO industries share information, discuss and debate issues.  The Forum is well-covered in the Indian press, and increasingly internationally as well, and the event web site's group blog is a rich source of divergent opinions and perspectives.  Key note speeches from people inside and outside of the industry (including Narayana Murthy, C.K. Prahlad and Shashi Tharoor) were of notably high quality.

It is an interesting time for Nasscom: How will an industry that has only known good times deal with the current economic downturn?  How will individual Indian firms fare?  While the mood at the conference itself was notably serious (especially for an industry event), some tier one Indian companies actually expect to benefit from the downturn.  Many European countries (far behind the US and the UK in terms of outsourcing) are expected to examine costs more closely, which is expected to open up these markets more to Indian BPO providers.  At the same time, new outsourcing destinations are emerging, within India and internationally.  This is happening not just because of the hunt for lower prices and new talent, but also to gain a foothold in new emerging markets. 

Three main drivers for outsourcing/offshoring from the customer side were articulated: (1) outsourcing to cut costs and access talent; (2) globalisation is impelling companies to consoldiate regional back-office operationsin regional hubs; and (3) companies in newly emerging economies are looking to outsource some of their work, especially to BPO firms that are close to them geographically.

To complicate matters, one common theme that ran through many of the talks was that India, a country of more than one billion people, is potentially facing increasing IT talent  shortages.

Discussion of IT-related skills development ran through many of the speeches and discussions.  While the Indian outsourcing industry is facing challenges at a scale that it has not seen before, and it was notable that a number of firms are seeing the current economic crisis as an opportunity.  By investing now in developing and retaining talent, some firms are looking to strengthen their position as the economic situation improves.  Infosys Chairman N.R. Narayana Murthy, one of the industry's most respected figures, announced that his firm has not rescinded any of the 1600 job offers it had extended to new graduates, but rather has increased the training period for new graduates from 16 to 29 weeks.  Investing now for the future -- by investing in skills development for their people -- may leave some Nasscom member companies in stronger positions as the world emerges from the current economic downturn.  This commitment to investing in people, even in times of economic downturn -- perhaps especially in times of economic downturn! -- made a strong impressions on many of African delegates at the Nasscom event.

Selected news reports

Note: Public domain image used at the top of this blog post obtained via Wikimedia Commons.


Michael Trucano

Visiting Fellow, Brookings, and Global Lead for Innovation in Education, World Bank

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