The Offshore Outsourcer Next

By Stan Gibson  |  Posted 2006-02-26 Print this article Print

Door"> The offshore outsourcer next door

The twin target that must be struck for India 2.0 to become real is for the players to become global, rather than just Indian, companies.
As a result, services provided by Indian outsourcing companies may be located around the corner instead of across the globe. That strategy will go hand in glove with the desire of many customers to be global as well.

"Youve got to be globally sourced and not have a single point of failure, whether in the U.S. or in India," said Louis Rosenthal, executive vice president for IT at ABN AMRO Bank, in a Nasscom presentation.

Scott McKay, senior vice president and CIO of Genworth Financial, agreed. "In business process globalization, you want to move beyond a regional footprint, to cover every zone where you have customers."

In response, Indian companies have been building worldwide operations. "We want to be a well-respected global company, with a more diverse mix of employees," said Infosys CEO Nandan Nilekani. He said Infosys will make acquisitions of foreign companies and bring their employees into the Infosys fold. "We need to make sure we become a global employer of choice," said Nilekani.

Infosys is already well on its way to globalization. The company will spend $65 million over the next five years to build two software development centers in China. Infosys already has established five centers in the United States—in Phoenix; Lisle, Ill.; Fremont, Calif.; Quincy, Mass.; and Berkeley Heights, N.J.—along with one center each in Canada, the United Kingdom and Japan.

Habib voiced support for the push. "Indian companies should recruit, train and deploy students from U.S. colleges in the U.S. It creates political capital," said Habib. "Todays hires are tomorrows customers. Look at Toyota."

India 2.0 is likely to be active in areas beyond the United States and the United Kingdom. Moving into non-English-speaking countries such as Germany and France will require not only new language skills but also knowledge of legal systems that are highly protective of displaced workers. Click here to read more about the future of Indian IT. As Indian companies become more skillful in addressing these issues, the larger ones will try harder to get work in Germany and France, said Vijay Khare, executive vice president and global delivery coordinator for Patni Computer Systems, in Mumbai.

Despite the challenges, Deutsche Bank has been outsourcing successfully with several Indian companies for several years, said Simon Fanning, strategic sourcing program director for Deutsche Bank, in London, who declined, however, to name the companies. "There are huge opportunities for Indian companies in Europe, but only those with a strategy will win," said Fanning. He said he has a program to teach project managers how to deal with Indian companies. "But we also need to teach Indians about Germany and Deutsche Bank culture. The culture shock goes both ways."

Next Page: Wages and turnover hurdles.

Stan Gibson is Executive Editor of eWEEK. In addition to taking part in Ziff Davis eSeminars and taking charge of special editorial projects, his columns and editorials appear regularly in both the print and online editions of eWEEK. He is chairman of eWEEK's Editorial Board, which received the 1999 Jesse H. Neal Award of the American Business Press. In ten years at eWEEK, Gibson has served eWEEK (formerly PC Week) as Executive Editor/eBiz Strategies, Deputy News Editor, Networking Editor, Assignment Editor and Department Editor. His Webcast program, 'Take Down,' appeared on He has appeared on many radio and television programs including TechTV, CNBC, PBS, WBZ-Boston, WEVD New York and New England Cable News. Gibson has appeared as keynoter at many conferences, including CAMP Expo, Society for Information Management, and the Technology Managers Forum. A 19-year veteran covering information technology, he was previously News Editor at Communications Week and was Software Editor and Systems Editor at Computerworld.

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