The Hindu : Tamil Nadu / Chennai News : `U.S. law on outsourcing will not hit Indian contracts'

Online edition of India's National Newspaper
Thursday, Aug 26, 2004

Tamil Nadu

Tamil Nadu - Chennai

`U.S. law on outsourcing will not hit Indian contracts'

By Our Staff Reporter

CHENNAI, AUG. 25. Allaying fears over a U.S. ban on outsourcing, A. Narayanan, senior manager, Strategic Sourcing, Wipro Spectramind, expressed confidence that the Business Process Outsourcing (BPO) sector would continue to grow in the years ahead and stabilise by 2008.

Addressing the human resources (HR) convention, `Horizon 04' of the Institute for Technology and Management here on Saturday, he said the contemplated U.S. ban on outsourcing of federal contracts would not affect the kind of work now being routed to India. Moreover, the ban would have "an emotional" rather economic basis as the U.S. industry had notched up $ 6.7 billion in savings through outsourcing and in the process bolstered the GDP, he said.

According to U.S. estimates, at least 85 per cent of firms in the U.S. would outsource one of their services by 2005-06.

A combination of time zone advantages, fast turnaround time, abundance of skilled English-speaking manpower, improved telecommunication infrastructure and competitive tariffs buttressed India's value propositions for enlarging its share from 10 per cent of the global business in BPO transactions.

Terming the BPO the fastest growing sector (a growth rate of 54 per cent), Mr. Narayanan said the downside for the country's prospects included paucity of industry-ready candidates with foreign language skills, work culture with a negative perception and a high attrition rate.

`Biggest advantage'

According to Mr. Narayanan, the sheer proportion of people, which was thought of as a handicap for the country, was proving a boon in attracting IT -enabled services. The 21 lakh graduates passing out every year in the country were the biggest advantage, he said.

P. Balaji, head, HR, Thomas International, Chennai, spoke on the company's psychometric testing, which was a widely used tool for behavioural assessment of candidates for recruitment.

Earlier inaugurating the convention, S. Santhana Gopal, deputy chief manager (HR and Administration), The Times of India group, Chennai, said one of the future challenges to HR managers was anticipating and initiating a change in the organisation. The HR person's role was crucial in changing both the culture of the firm and the processes, he said.

P. V. Raghavan, Director of ITM, and S. Sabesan, Placement Coordinator, spoke.

A panel discussion on `Reinventing HR practices for corporate excellence' was held.

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