Posted on 10/03/2004 4:22:37 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
New Delhi, Oct 3 (UNI) Top 100 global financial companies will offshore jobs worth over 200 billion dollars to India and other countries in 2005, says a new research by Deloitte and Touche.
''Financial institutions are moving business functions to India because they are recognising compelling cost advantages and they are able to lock in savings and manage risks effectively,'' Mr Peter Lowes, the US leader of Deloitte's outsourcing practice, said.
In 2005, Deloitte expects the top 100 global financial companies to offshore a total of 210 billion dollars of their operating costs, saving on average, 700 million dollars.
The survey, covering 43 financial services companies around the world, suggests that the number of firms taking the offshore option increased by 38 per cent last year.
Deloitte also estimated that by 2010, 20 per cent of the operating costs of global financial institutions would be centred abroad, reducing costs by about 37 per cent.
Analyst Datamonitor also said earlier this year that outsourced, offshore call centre positions will more than double by 2007 to 241,000, from close to 110,000 at the end of last year.
However, the Deloitte survey said most of the companies sending jobs to India and other countries had concerns about risk management. Half of those surveyed had contingency plans if the offshore operation went wrong.
''Risks related to government change and policy changes are prompting companies to have a multiple-country strategy, which makes it easy for them to migrate services if there is a problem in any operation,'' Mr Lowes said.
Apart from India, other countries with high proficiency in English are emerging as popular destinations, including Malaysia and the Philippines, the report added.
I really have a problem when people complain about outsourcing...how many of us will by the cheaper brand over American made. I worry about jobs too, but until Americans buy all MADE IN THE USA products we can't really say anything.
take call centers as an example: the US corporate model is - if we all do it, none of us will have a competitive advantage over one another - and we all can provide lousy customer support, while saving dollars using offshore centers. so where are consumers going to go, if we all suck?
in your example, if every steak house runied the meat, you wouldn't know the difference after a while.
I don't use caps, why waste the finger effort.
I stand by my comment about 7-eleven and gas station workers getting killed on the job - it may not be as dangerous as being a police officer, especially in a high crime urban area, but it still is a job where people die alot during robberies.
It seems to me that letting these nations reap the profits from better jobs, we are "teaching a poor man to fish" rather than just handing him a fish whenever he is hungry.
True, most of products are made abroad, but increased demand ups the stock market, and that's better for all of us.
You're right, this IS a tough sell to the American voter. But it's a global perspective that makes sense to me.
Japan should be the example for the world. Did Japan build its auto industry, currently the best in the world, by lining up and offering low cost labor to GM and Ford, to move their factories to Japan? No, they used their own capital and people and brain power to create an industry which became competitive (and eventually surpassed) the world leader.
I have no problem with India investing its own capital and brain power to build software companies that rival Oracle. But that is not what is happening. Instead of building companies to compete with Oracle, US executives are sending Oracle to India, 100 engineers at a time. That's not global competition.
And exactly how much is "insourced" such as auto plants for Toyota? My guess is that the net is very small between outsourcing and insourcing.
I'm an American and what counts to me is what is good for America. I think that the majority of Americans agree. They are not interested in building up the economies of other countries at our expense. In fact, it's contrary to human nature.
several reasons - Japan has competive labor rates and living standards. and also, specific to autos, I think Japan knew that the US would act to protect that industry with tariffs, and avoided a flash point on that issue by building cars they were selling in the US market anyway - in the US.
Fortunately, the BLS has charts. And with the data presented on the charts fresh in my mind, I can say with absolutely no fear of contradiction that this level of granularity is beyond my expertise and also beyond my willingness to research without a cold, frosty beverage, of which I am fresh out of this evening.
Which is a long-winded way of saying "Torie's got my back on this one."
Regards.
Most of the world has been outsourcing to the US for the past many years...now they are looking for alternatives...nothing wrong with that....
Most of the world has been outsourcing to the US for the past many years...now they are looking for alternatives...nothing wrong with that....
I called my credit card's customer service line about a month ago to ask some questions about making a payment online and I got one of these offshore help services. I ended up in an argument with this India woman because I wouldn't give her sensitive information about myself. She insisted that my account needed this update and that I MUST give her this sensitive identifying info or my account would be 'tagged' as me being non cooperative. I told her to send me a questionaire in the mail and I would be happy to update my account info, but she said they could not do that. I worry about identity theft playing a big part in these offshore 'services'.
Architects and design firms all over LA are hiring asian, indian and other foreigners because they will work at a 50% lower rate than american workers... they will also work without benefits.
I wouldn't mind as much if
a) the CEO's and suchforth were honest about what they were doing;
b) the replacement people were competent
c) the long-term risks had been thought through and allowed for.
I am most concerned about Trojans and/or backdoors being installed -- see for example one of Tom Clancy's novels where a backdoor is installed to take out all of one day's transactions on the NY Stock Exchange.
Sounds like smart business to me. Unless of course you believe companies shouldn't be in business to actually make money.
How inconsiderate of you to crash a Willie Green doom and gloom pity party with good news like this.
Sounds like smart business to me. Unless of course you believe companies shouldn't be in business to actually make money.
What is the combined revenue of the top 100 global financial companies?
What is the sum of their combined operating costs?
If you do the math, you realize this means that the top 100 global financial companies will AVERAGE 2.1 billion in costs to be outsourced to India next year alone.
If, for example, John Kerry, or Dan Rather said this, would
we find it exposed in a matter of hours on other blogs?
Particularly well expressed point. We're getting shafted from the consumer end at the same time as the employment end. What's so great about it?
At least with the automotive industry, we went to the trouble of saving those jobs. If the government hadn't stepped in, the entire industry would have gone overseas, leaving only the boutique projects behind, similar to the motorcycle industry where Harleys are the only american made cycles any more. We don't have any TVs, VCRs, DVDs, Radios, nor any other high volume consumer products built in this country any more.
In the semiconductor industry, we used to hear that Americans are better at fabbing, Asia didn't have good enough Quality Assurance; after those jobs migrated, we used to hear that Test & Assembly would stay here because Asia didn't have good enough control over engineering; after those jobs migrated, we used to hear that Design jobs were safe because Asia didn't have strong enough resources there. Now we're seeing those jobs go. The last set of jobs will be all those management yucks that we won't need any more because there's no one left to manage. The entire industry has been decimated. The Software side is in the same boat.
The strange thing was that we used to hear the unions getting blamed for overpricing the american workers in the auto industry. There was no such union presence in the electronics industries. But now we see that the unions had a hand in saving the automotive industry while the foxes are still guarding the henhouse in the electronics industry.
The way I see it, I'm glad we saved that american automotive industry and we should be doing more to save the high tech jobs.
We are "teaching a poor man to fish" in our own fishery. It only makes sense to do it if we can protect our own interests.
To say that "increased demand ups the stock market, and that's better for all of us" is an assumption that we all have the capability of being involved in the stock market, which is not only just pure baloney but it leaves republicans vulnerable to the charge that they lack compassion. A lack of compassion is one of the things I have noticed in the debates on this topic so far. I doubt anyone who has been through such a restructuring of their own industry would be missing that compassion gene.
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