Posted on 05/14/2008 5:34:20 PM PDT by AmericanInTokyo
US slump to prop up India as next offshoring hotspot 14 May, 2008, 0750 hrs IST,Chiranjoy Sen, TNN
BANGALORE: Belt-tightening by global technology giants—a fallout of US economic slowdown—is likely to reinforce India as the most preferred offshoring destination. Top technology firms are actively moving part of their workforce from the US, UK and European markets to lower-cost destinations.
They cite availability of local talent, better delivery and conducive enviroment as key offshoring reasons. While they may not admit it, firms would be looking at stepping the gas on offshoring to curb bloating costs and to lift margins.
Networking and telecom software major Nortel, for one, has recently decided to move almost 1,000 jobs from the US and the UK to low-cost , high-growth destinations like India, China and Mexico. The move is aimed at both restructuring business and reducing costs, Nortel Networks global services president Dietmar Wendt told ET.
The company plans to double its $2.1-billion global services business over the next three to five years with a significant portion coming from multimedia and contact centre services. “India is critical to grow the business and the largest percentage of the job shift will be to India, ” says Wendt.
For Andy Green, who took over as Logica CEO in January, two of the main drivers to revitalise the firm has been to double offshore and nearshore headcount to 8,000 by end 2009; and a significant drop in costs resulting from a reduction of 3% of overall headcount.
And, the lynchpin of this strategy, which is expected to drive Logica’s growth to above-market levels from end of 2008, will be the 1,500-seater second site at Chennai. The plan to deliver abovemarket growth is funded by a £110 million restructuring that will lead to cost savings reaching an annualised £80 million from 2010.
To boot, software services major CSC had announced sometime back that it was shifting more UK jobs offshore in an effort to control costs. “Moving positions to India will give software companies higher leverage on costs but there are other key business drivers such as focus on revenue creation, increasing productivity and efficiency that will be a major determinant of the shift, ” says Symphony Services managing director Ajay Kela.
might be a good one for the Asian ping list...just thinkin’ aloud....
Nothing new here, jobs have been going to India as fast as they can be shipped there.
indeed. and it may indeed accelerate
I’m sure there are a lot of good programmers in India, but as a percentage, it is much lower than the US. I can tell you that many of the Indian student I’ve seen cannot program their way out of a paper bag. But they are polite and speak good English. In any case, the cost savings is probably going to be largely an illusion.
i think for example much of hollywood movie support is going to end up in india or elsewhere...post production, writing, graphics, special effects, this/that and the other.... let’s see
I want to see import taxes on all software authored overseas. It is millions of dollars of corporate investment. Doesn’t matter that it is “imported” through a wire. It is manufactured and assembled overseas.
I also find it crappy that American corporations won’t let employees stateside telecommute but they have no problem employing people on the other side of the globe and communicating with them by shared computer desktops and teleconferences.
Well Peter Jackson brought digital effects production to New Zealand. Hollywood movies have been shot in Canada and Eastern Europe to avoid stateside union expenses.
precisely. but I meant, a lot more of that, a lot more.
“In any case, the cost savings is probably going to be largely an illusion.”
Yes, but bean-counters can always make the numbers work to make it look like a profit if they really want to.
I’m surprised that off-shoring is increasing. With the dollar so low it hardly makes sense anymore, especially with the difficulties in communications, specs, etc. It’s a very inefficient way to put products together.
Did not you know that an MBA from a Ivy League school, gated community residence, and a private yacht slip allows one to be able to do that?? /sarc
To all the gleeful Indians,.... you’ll get yours. Just wait.
What is interesting is that the number of graduating elite IT-background young management and specialists in India coming out of the IITs (India Institutes of Technology) are increasingly saying they will stay in India for their careers, rather than going to the American Dream. The numbers are going down more and more it seems.
Bump
Hmmm. We get new H1b folks at our place almost every week. No slow down here. They may know there tech but there english communication is very lacking.
With the way movies are turning into computer cartoons, the “old” way of making movies is going by the wayside.
But a few flops like Speed Racer made by people who never understood what made a franchise work in the first place can pull the plug on the computer.
“What is interesting is that the number of graduating elite IT-background young management and specialists in India coming out of the IITs (India Institutes of Technology) are increasingly saying they will stay in India for their careers, rather than going to the American Dream. The numbers are going down more and more it seems.
You can’t touch IIT types for under $150K plus bonus.
The corporate programming outsourcing is done by high-school grads who have taken a two-week training course.
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