The impact of business outsourcing on corporate real estate in India

Driven by Western companies\u27 requirements for efficiency and effectiveness, a trend towards outsourcing of business activities to India and other low-cost countries commenced in the early 1990s and has continued to grow at a surprisingly fast pace. In a relatively short timeframe India has become a global hub for back-office services, although the effect on the urban cities is yet to be fully comprehended. As American and European companies continue to relocate their information technology services and other back office works to the subcontinent, there has been a considerable flow-on effect on Indian corporate real estate. This paper addresses two key questions. Firstly, the factors important for Western companies\u27 outsourcing of organisational activities to India, and secondly, the effect of business outsourcing on corporate real estate locational requirements in India. A survey of corporate real estate representatives in India and the UK was conducted with the results providing an insight into the present state and possible future direction of outsourcing for India. This research presents a unique insight into the impacts of Western business outsourcing on corporate real estate in India, and presents findings that are useful to both organisations seeking to relocate business activities to India and for property market analysts looking to understand drivers behind this sustained demand for Indian corporate real estate

Outsourcing and the Globalizing Legal Profession

The issue of outsourcing jobs abroad stirs great emotion among Americans. Economic free-traders fiercely defend outsourcing as a positive for the U.S. economy, while critics contend that corporate desire for low wages, alone, drives this practice. In this study Professor Krishnan focuses on a specific type of outsourcing, one which has received scant scholarly attention to date-legal outsourcing. Indeed, because the work is often paralegal in nature, many see the outsourcing of legal jobs overseas as no different from other types of outsourcing. But by using case studies of both the United States and India, the latter of which is receiving an ever increasing amount of outsourced American legal work, Professor Krishnan describes how there are many forms to the legal outsourcing model and how this practice can entail a range of legal services. This Article, however, moves beyond providing a descriptive account of legal outsourcing. Legal outsourcing to India occurs against the backdrop of an Indian legal system in crisis. For those who are fortunate to benefit from legal outsourcing, the payoffs are indeed rewarding. But most Indians, of course, are not participants in--or beneficiaries of-this practice. In fact, in everyday Indian parlance, the word \u27legal is associated with a process that is delay- ridden, backlogged, and unduly expensive. It might seem that legal outsourcing is unconnected to the problems that have long plagued India\u27s legal system. Yet as this Article will argue, in addition to having an ethical obligation to provide assistance to the legal environment on which they draw, those engaging in legal outsourcing also have an economic incentive to ensure that India has a better-operating legal system. As a means of raising much needed revenue to fund its legal reform efforts, India, as Professor Krishnan proposes, might levy a minimal fee on U.S. legal outsourcers, and because strengthening the rule of law is ultimately in their financial interest, these American investors may well accept shouldering such a cost

Strategies for Sustaining the Edge in Offshore Outsourcing of Services: The Case of India

PURPOSE: Offshore outsourcing offers competitive advantages when goods and services are produced economically and with acceptable or superior quality by suppliers located outside a firm\u27s home country. The purpose of this paper is to focus on India as a destination for offshore outsourcing of services and the challenges it faces in maintaining its leadership in this area. The paper discusses the growth of services outsourcing and the economic and environmental forces that have contributed to the outsourcing of high-end services, also known as knowledge process outsourcing (KPO). DESIGN/METHODOLOGY/APPROACH: This article surveys the literature of offshore outsourcing and identifies strategic drivers and options that can help India to grow and consolidate its position as an exporter of services and build long-term competitive advantages in its relationships with global partners. To understand why nations gain competitive advantage in certain industries, Porter\u27s “diamond” model is utilized as a broad framework for examining policies and national strategies that can sustain India\u27s competitive advantage in outsourcing of knowledge-based services. The paper discusses India\u27s current and prospective assets and liabilities that correspond to the model\u27s four components. FINDINGS: The article discusses India\u27s competitive edge as a leading supplier of knowledge-based services and proposes a model for sustaining this edge. The model proposes key policy steps to move from the current position (e.g. supplier of business process outsourcing services) to a role of knowledge leader by providing advanced value added services to global clients. This model suggests ways in which a supplier nation can gain leverage in the value chain. RESEARCH LIMITATIONS/IMPLICATIONS: The article is conceptual, not empirical. Public and corporate policy implications are presented to strengthen India\u27s competitive advantages in outsourced services. PRACTICAL IMPLICATIONS: The article presents a strategic roadmap with policy implications that can help move India up the value chain from being primarily a destination for low-end business process outsourcing (BPO) to that of a co-equal, high value-adding partner or principal who offers knowledge leadership in the design and delivery of services for global markets. ORIGINALITY/VALUE: The article discusses a nation\u27s technical strengths, as well as cultural and infrastructure weaknesses, that can contribute to volatility as a global outsourcing leader. The article also presents strategies that can reduce a nation\u27s vulnerabilities to competitive actions

Information systems offshore outsourcing: a descriptive analysis

Purpose - The present paper has as its aim to deepen in the study of Information Systems Offshore Outsourcing, proposing three essential steps to make this decision: weighing up the advantages and risks of Offshore Outsourcing; analysing the taxonomy of this phenomenon; and determining its current geography. Design/Methodology/Approach - With that objective in mind, it was decided to base the research work on the literature about this topic and the review of reports and statistics coming from different sources (consultants, the press, public institutions, etc.). Findings - Offshore Outsourcing has grown vertiginously in recent years. Its advantages exceed even those of onshore outsourcing, though it also involves greater risks derived from the (cultural and physical) distance existing between customer and provider. Various types of services and customer-provider relationships hide under the umbrella of Offshore Outsourcing; i.e. it is not a homogeneous phenomenon. The main Offshore Outsourcing customers can be found in the USA and Europe, mainly in the UK but also in other countries such as Germany and France. As for provider firms, most of them are located in Asia −outstandingly in India but also in China and Russia. At present, there are important providers scattered in other continents as well. Originality/Value - The conclusions suggest that the range of potential Offshore Outsourcing destinations must be widened and that the search for a provider cannot be based exclusively on cost savings; other considerations such as quality, security and proximity of the provider must also be taken into consideration. That is precisely the reason why the study of new countries like Spain as Offshore Outsourcing destinations is proposed

Adjusting to Globalization Through Skills Development Strategies

[Excerpt] The aim of this chapter is to describe and analyze the efforts at skills development in Singapore and in India\u27s booming outsourcing sector. Singapore is an important case because it started its skills development efforts in the early 1980s at a time when outsourcing of manufacturing was just beginning, and it has become one of the best-known examples of a nation that has successfully and continuously upskilled its workforce over the past twenty-five years. India, on the other hand, is just beginning to focus on skills development, stimulated by the growth in outsourcing of high-end services such as software development and business process outsourcing (BPO) of financial and medical research and low-end services such as call centers

U.S. Offshoring Of Jobs And Businesses To India: A Survey And Analysis

Recently, offshore-outsourcing of U.S. jobs in general and particularly to India has drawn considerable attention from various quarters in the U.S. A combination of factors have propelled this issue to the forefront: ominous headlines; downsizing of corporate labor force; huge trade deficits, increased global competition; poor job growth in a healthy economy; loss of white-collar and professional jobs, etc. The trend of jobs outsourced to India is projected to be sharply upward in the near future. India has clearly benefited from the influx of new jobs. It has also brought some cultural changes in the younger generation in India not well received by the local communities. However, the overall cultural understanding between India and the U.S. has certainly improved. The study finds that the U.S. businesses have many compelling reasons in outsourcing jobs to India: cost savings due to wage differentials; decreasing need for capital investment; availability of educated and skilled workforce, etc. The offshore-outsourcing also has many disadvantages: loss of security; increased dependency; huge startup and communication costs; inadequate protection of intellectual property; poor infrastructure; different legal systems; high levels of bureaucracy and corruption, etc. As the economic theories suggest, the authors find that, given the current competitive global business environment, offshore-outsourcing is an essential part of sound business decisions that U.S. corporations need to make to remain economically viable in the long-run. The short-run problem of displaced workers, although highly important, should be addressed in ways other than imposing trade restrictions, or isolating U.S. from world competition

Offshore outsourcing - A global shift in the present IT industry

The paper analyses the offshore outsourcing of IT services (OOIT), which have become increasingly important for the global IT industry. Through this rapid process of firm relocation, a new terminology has emerged, which forms the starting point for our paper. We compare wage cost differentials of IT workers in key offshore locations like India to those in the US and Europe, incorporating the hidden costs of offshoring - including long-term risks and opportunities - in order to determine the total cost of offshore outsourcing activities. The debate on the potential future negative employment impacts in the major OECD countries recently became a point of political contention in the US presidential election campaign, reflecting widespread fears in the US and elsewhere that outsourcing will lead to decreased income and job loss. In Europe, policy makers are searching for instruments to guide these developments so that major social disruptions do not lead to disproportionately negative welfare impacts in the short term. The future costs and benefits of outsourcing can currently be assessed only in broad terms due to the lack of adequate data and representative statistics. However, the theory of comparative advantages suggests that overall, offshoring and inshoring countries will gain from the new international division of labour in the long run. --offshore outsourcing of IT,international factor movements and labour markets,international business,multinational firms

Prospects for IT-Enabled Services Under a Indo-US FTA

ITES/BPO services is an important and growing component of Indias trade in services with the US. While the Indian government has implemented several measures to support the growth of this sector, Indian companies face various barriers in the US market such as anti-outsourcing regulations, restrictive visa/work permit regime and concerns relating to protection of sensitive data. Multilateral negotiations would have been the best route to address many of these barriers, but with the recent suspension of the Doha Round of talks, it has become important for countries to evaluate alternative routes such as bilateral Free Trade Agreements. In fact, after the suspension of the multilateral negotiations, both India and the US have refocused on bilateral agreements. In this context, this study discusses the current and potential trade between India and the US in ITES/BPO services, identifies barriers to trade and explores how an FTA can enhance bilateral trade in this sector. The study shows that the US-FTAs have achieved a higher level of liberalization than in the WTO. It suggests various negotiating strategies for India such as a negative list approach, signing mutual recognition agreements in key professional services, asking for a H1B1 type of visa, pushing for removal of domestic regulation-related barriers, among others which would enhance market access for Indian companies in the US. It also points out that Indo-US collaborations for data protection, skill development and raising awareness of the advantages of outsourcing in the US would be mutually beneficial. The study discusses regulatory and other reforms which will improve the productivity, efficiency and global competitiveness of this sector and enable the country to gain from the FTA.Indo-US FTA, GATS, bilateral agreements, Business Process Outsourcing, IT-enabled services

Call Centre Outsourcing: Comparative Assessment of Ghana’s Readiness as a Provider

Many multinational companies are moving their back offices to developing countries where costs (especially labour) is low. The government of Ghana has therefore taken the initiative, through the Ghana Investment Promotions Centre (GIPC) and the Ghana Free Zones Board (GFZB), to develop the business process outsourcing (BPO) business including call centres. This paper assesses the readiness of Ghana as a competitive call centre outsourcing provider on the global market. Data is largely from primary sources and through questionnaire administration. Data relating to 23 call centre outsourcing provider-companies in Ghana, India, USA and UK were analysed. Most of the factors relating to Ghana were weighed against those of India, the most renowned call centre service provider-nation in the world. Outcome of the analysis together with economic indicators were then used to evaluate the strengths, weaknesses, opportunities and threats (SWOT) of the Ghanaian call centre industry. The results show that in spite of favourable factors such as lower cost of labour, English language proficiency, and political stability, Ghana seems less capable of offering strong competition in the call centre outsourcing market if its telecommunication infrastructure, especially voice over internet protocol (VoIP); contracting strategies; and human skills are not upgraded. Keywords: Call centre, Ghana, India, outsourcing, SWOT matri

Distributed software development in a financial services organisation

The outsourcing of IS functionality to offshore development firms has been a growth industry that has blossomed over the last 10 years. This is as a result of organisations, seeking to optimise costs, mitigate risks, and achieve greater return on shareholder value by delegating the delivery of business information systems and applications to third party vendors. At the same time, distributed approaches to software development has arisen, there has been a growing interest in the applicability of lightweight or Agile development methodologies. As such, this paper this paper discusses experiences of a European Financial Services firm in outsourcing, and subsequently offshoring, two of its IT projects to vendor firms in India, where Agile approaches were used. The authors provide a model of the financial firm’s critical success factors presented as a frame of reference for others interested and involved in this topical area