India, No Longer an Outsourcing Favorite by Sam Kligman

http://www.businessweek.com/articles/2012-03-15/outsourcing-a-passage-out-of-india

India’s sales pitch is going to need to change for American companies to want to employ its workers in upcoming years. That is, in the past India was always good for what Robyn Meredith refers to as “back office operations” such as running call centers and data storage centers at a fraction of what it would cost to do the same thing in the US. However, many US companies are now looking to export their “skilled white-collar jobs in research, accounting, procurement, and financial analysis” to lower-cost countries but are not using India even though it is the cheapest. The doctor suspects that the rationale for this can be encapsulated by the opinion held by Phil Fersht, CEO of HfS. Phil states that “the higher-value outsourcing jobs require a greater understanding of business context and a higher amount of interaction with clients”; something he concludes cannot be found as easily in India. Therefore, businesses are turning to “nearshoring” jobs to European and South American countries. Employing workers in these countries often have the benefit of being in the same time zone which by now most businesses understand is advantageous for creating organizational synergy. Furthermore, labor in many of these countries is still very cheap and employing workers from them also has the added benefit of multilingual employees that do not have Indian accents (which carry a negative connotation) should a company choose to also locate its call centers there. Therefore, it is clear that the India workforce sales pitch will soon be in need of an image overhaul if it wants to stay internationally competitive.

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