Indian BPOs unfazed by New Jersey's anti-outsourcing law

Date: Tuesday, December 03, 2002 3:05 PM

H-1B and JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

Get ready to learn a new acronym - BPO stands for Business Process
Outsourcing.

Senator Shirley K. Tuner has introduced a bill in New Jersey to prevent
outsourcing of government contracts to citizens outside the U.S. in a bid to
prevent loss of jobs to foreign countries. If we had more politicians like
her we wouldn't have these arrogant Indian BPOs thumbing their noses at the
United States.

The high point of this article has to be when BPO shill K. Ganesh said that
Nike Shoes have gone down in price ever since the jobs were shipped
overseas. I have don't doubt his claim that Nike reaped 2 billion dollars as
a result of their slave labor sweathouses but cheaper prices??? I can't stop
laughing at his stupidity. Go to http://niketown.nike.com/ and you will see
what I mean.

http://www.siliconindia.com/shownewsdata.asp?newsno=17728&newscat=Technology

Indian BPOs unfazed by New Jersey's anti-outsourcing law
IANS

Tuesday, November 26, 2002

The burgeoning Indian business process outsourcing (BPO) sector does not
seem too perturbed over a proposed bill in the U.S. state of New Jersey to
block outsourcing to other countries, including India.

BANGALORE: Industry officials termed the bill as an "isolated" instance in a
globalised business environment, in which outsourcing to India cuts costs,
provides quality and improves efficiencies.

Initially, eyebrows were raised in the IT industry following reports that
Senator Shirley K. Tuner has introduced the bill in New Jersey to prevent
outsourcing of government contracts to citizens outside the U.S. in a bid to
prevent loss of jobs to foreign countries.

"Moving of processes to India does not mean money so saved is saved or
diverted to India. On the contrary, it saves and creates more money for U.S.
companies to invest and create other jobs there. It is, actually, their
economy that improves with our efficiencies," ICICIonesource president K.
Ganesh said.

TransWorks CEO Prakash Gurbaxani added: "If at all it has any impact, it
will be on two or three Indian BPO companies with contracts from governments
in U.S. states. It is, largely, private U.S. companies that outsource work
to India."

Raju Bhatnagar, head of BPO at Cognizant Technology Solutions, said: "The
lessons of the manufacturing sector are there for all to see. Ultimately,
economic forces will play their part, even if it means over a period of
time, to see that outsourcing to India is not affected."

New Jersey-based Cognizant is also setting up a BPO unit here to exploit
growing opportunities in the financial sector, by initially opening a
150-seater call centre-cum-back office process centre in the first quarter
of 2003 -- January-March.

Industry officials quote the example of Nike, which outsourced manufacturing
of its shoes to Asia and reaped the benefits to record sales of $2 billion.

"The prices of shoes went down and sales went up in the U.S. There is a huge
benefit from outsourcing that private companies in the U.S. realise," said
Ganesh.

Gurbaxani added: "The perception that jobs are being lost existed when
manufacturing shifted to Asian countries. But the same perception did not
exist when software was outsourced because it was need-based.

"Ultimately, competitive pressures will play their role. It is nothing to be
perturbed about."

Ganesh said jobs were not being cut in the U.S. to outsource. "Availability
of people and high rates of attrition are critical factors that have led to
outsourcing.

"What Indian BPOs have provided in exchange is cost effectiveness, quality
and productivity. It is efficiency that improves economy."

The other factor, officials who did not want to be identified say, is that
it is difficult to prevent outsourcing because unions in America, unlike
Britain, are not strong in the services sector.

"It appears more a political move now, but hard economics will ultimately
benefit Indian companies," said an official of a BPO, requesting anonymity.

"Don't forget that the U.S. is leading the globalisation process in the
world. It can't afford to block its own progress. It is the bottom-line that
matters and the private sector in the U.S. is strong enough to influence
such decisions," said another official.

As Wipro chairman Azim Premji told an International Data Corp. (IDC) meeting
last week: "The fundamental truth is that outsourcing is no longer a desired
choice but an absolute strategic necessity. Services and functions that can
be done at greater efficiencies and effectiveness are best outsourced."

Premji quoted the Nasscom-McKinsey report 2002, which predicts two million
jobs that outsourcing centres in India will provide in six years. By 2008,
the revenue predicted is around $24 billion, which will be three percent of
India's gross domestic product (GDP).

The growth rate achieved by the sector was 71 percent last year making it
the fastest growing industry. In the last five years, more than 336 centres
have come up in India.

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