IBM’s India strategy of concentrating in the outsourcing and BPO services from Indian companies is working well for them. Last month IBM and Bharati Airtel signed an outsource agreement in which IBM will provide customer service support to Airtel’s top-end customers. Recently Bharati outsourced all the IT support and services to IBM for its Sri Lanka operation. For the 2008 third quarter, IBM reported a 24 percent increase in revenue from its Indian operations. Like IBM, HP’s Indian subsidiary won outsource deals with Godrej, Bank of India, Britannia, etc. Similiary MNC software companies like Oracle, Microsoft, and SAP won major outsource deals with the Indian companies.
Companies have been collecting huge volume of business data for several years. The growth of Internet accelerated the data collection trends as businesses started offering their services over World Wide Web. Read more
Journalism work has been outsourced to India for several years and the trend will increase in the current economic conditions. The print media is facing difficult time competing with online news, blogs, etc. The advertisement revenue coming to the print media is reduced year over year due to tough competition from web advertisements. For example Craigslist literally killed the classified advertisements revenue for all the major news papers in US. Similarly sites like monster.com, dice.com, Naukri.com stole the market share for job advertisements from the news papers.
The offshore industry of India is plagued by different issues and we have discussed a lot of them in our previous discussions. The situation in not better yet and there is bleak chance that it will recover soon—a long-term potential and perspective is what industry experts are relying on. At the same time, legal process outsourcing (LPO) companies are hiring a good number of new professionals because of the demand of litigations services from the USA is on all-time high. It is calculated that by outsourcing their legal and litigation back-office work to Indian vendors, US companies can save about 70 per cent in costs, which is quite considerable and demands much analysis of the future of this industry.
In the lost couple of years there has been significant interest in knowledge process outsourcing in the global offshore outsourcing market. Industry research organizations are predicating that due to current economic slowdown more US companies will explore KPO and outsource non-transactional related processes to increase their business efficiency and spur innovation. Read more
Due to US and global recession Indian based small and mid sized IT and BPO firms will be in trouble soon. Most of these companies are niche players and they have revenue less than 10 cores. For example only 25% of the companies registered with Software Technology Park (STPI), has revenue more than. 100 core rupees. From overall software export, India gets 70% from top 20 companies and the rest comes from small and mid-sized companies. Forrester Research analyst Sudin Apte says the bottom 30% of the Indian IT and BPO companies will consolidate sooner than later to stay in business. He also predicts that these companies will have significant cash-flow issues for the next quarter and they either need to have strategic partnerships with bigger companies or they will go out of business soon due to cash flow issues. Many other analysts agree that it is tough time for small and mid-sized firms in India and they also think that there is significant interest from other big companies and investors for mergers and acquisitions.
The future of KPO in India is deemed as quite bright. Though presently, it is in its infantile state, the experts and companies already well-established in this process declare that India will awake to the rising demands of KPO in near future and would be able to supplement and stabilize the meltdown of global economy and its impact on outsourcing industry. Legal Process Outsourcing (LPO) is one striking part of this huge potential and we have already discussed in our previous discussion that legal outsourcing to India is on rise. The present situation of global financial crisis only helps this cause and India is going to benefit from it.
Indian IT companies reduced their hiring phase due to international financial crisis, but the pure Indian BPO Companies are planning to increase their hiring, hoping that they will get more business from US and other western companies.
Business week published an article about a report from US Citizenship and Immigration Services that finds more than 13% of H-1B visa petitions are fraudulent. Following are some of the violations specified:
Companies specify locations for the visa worker but they never worked on those locations specified in the visa application.
H-1B workers were paid the below the minimum wage for the qualifications specified in the visa application.
Job description specified in the visa application does not match with the job duties of the visa applicant
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With globalization and offshore outsourcing on the rise, several companies have employees and contractors using their business critical data in various countries like India, China, Brazil, etc. Many companies do not have comprehensive security policies and procedures to mange their business data in offshore locations. Cisco systems sponsored a study to find the cultural differences of employees working in various countries and how it affects their handling of secure data. The study finds that employees and their culture play a key role in the security of business critical data.