The Hindu : Business : Outsourcing is here to stay

Online edition of India's National Newspaper
Friday, Oct 15, 2004

Business

Business

Outsourcing is here to stay

By P. Vikram Reddy

HYDERABAD, OCT. 14. The Information Technology Association of America (ITAA) strongly advocates global sourcing and is against any restrictions. It also believes that the argument of global sourcing (or outsourcing) hurting the U.S. is `factually wrong'. In fact, over 90,000 jobs were created last year, said Harris N. Miller, President of ITAA. But with bills having been introduced virtually in all the State Legislatures in session (40 States) on issues such as call centre identification, what will be the impact on outsourcing if John Kerry is elected in the November 2 Presidential elections? Mr. Miller admits of higher likelihood of restrictions on private and public sectors. Possibilities are regulatory barriers such as the Treasury Department not allowing financial records to go offshore, or healthcare records not allowed offshore.

Similarly, potential exists in any regulatory industry, on security concerns. "Not that this will happen, but it is potentially possible", he said adding that top priority must now be given to "Cyber security" if one were to do business globally.

Speaking at a meeting organised by the National Association of Software and Services Companies (Nasscom) here on Thursday, he ridiculed the legislations referring to some of them as "silly" and "stupid", like a call centre professional having to identify himself by name.

Speaking to The Hindu later, he said while issues might continue to be there at federal and State level, its impact on offshoring might be less.

Mr. Miller pointed out that "at the end of the day market forces prevail, and consumers (or companies) buy whatever is cheaper (in whichever part of the world)". Even now at least a 100 major companies (of 375 members of ITAA) are setting up operations in China. Companies are looking at East Europe and China because they are more aggressive in marketing.

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