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Outsourcing Alternatives to India economically and politically unstable

Outsourcing: a love / hatred of USIT practitioners. Ask the employee average in any IT organization, and the audience in the fear of jobs going to India and China is almost inevitable. Although many have begun the transition to management business services (BSM) to respond to the trends of chaos work, work consumes more than one third of IT budgets. This figure is in full compliance with A recent Gartner report indicates that 37% of IT budget type goes directly to staff costs. What you are also the IOC is going to handle this hectic? Outsourcing or "offshoring," the answer?

How can we trust their overseas operations while maintaining compliance guidelines on best practices such as ITIL and MOF? How do you keep the Sarbanes-Oxley, PCI, HIPAA or when using 100% of offshore resources, with much less control?

Just about everyone in the IT sector has at least one report on various operational tasks to be "relocated" India, and there is a call center, Network Operations Center (NOC), or the infrastructure team has been immune to rumors of jobs going offshore. Cities no longer New Delhi, Mumbai and simple manufacturing facilities and suppliers of raw materials. The country is home to some of the largest call centers and business development centers worldwide. In late 2005, the workforce numbered 350 000 Indian outsourcing. This total is now estimated at over 800,000, with many new positions become vacant lack of qualified candidates.

Eleven years ago this month, USA Today published an article titled "Maybe eliminated political instability in India? "Considering only new the last six months, the answer to this question is an emphatic NO.

The trend toward twenty-first century India did not encourage the kind of radical political change one would expect from the world's largest democracy. In addition, the government's refusal India to fight with more force against the theft of intellectual property is the substance that makes your legal team to lose many nights of sleep.

Recession has made its way to India. Dec. 4, 2008 The New York Times published an article on the outsourcing wave of companies to reduce their daily activities in India due to the unhealthy climate of financial crisis. From this week, the Indian rupee is at a historical low.

India is a strong case of the world's back office, "but failed to produce a favorable environment front-office operations such as product innovation and marketing strategies. The idea predominant in the last five years has been that Indian outsourcing companies are masterful in the art of efficiency and product development. And now?

On January 7, 2009, stocks India has taken a fall in the wake of announcements by Satyam Computer Services as summaries corporate profits were inflated for several years. The announcement by the president and founder, Satyam had falsified records directly into permanently has thrown in the sub-contracting the entire Indian industry in turmoil dramatic. As a provider of back office services for a large many of the banks large worldwide and healthcare facilities, the result of the crisis Satyam is no less devastating.

On Friday, January 9, 2009 to new sources have reported that the interim CEO, Ram Mynampati not confident that the company can continue beyond the next few weeks. Mynampati said they were working to find the money needed to pay current employees, suppliers and creditors.

In less than a week, has crossed the ocean crisis Pacific hit U.S. shores. PricewaterhouseCoopers giant is expected to pay a high price for emerging fraud. The auditor is responsible for monitoring Satyam Financial for more than eight years, and investors Satyam must go to court to try to recover losses. According to legal sources within India, most likely, rather than directly attacking PricewaterhouseCoopers Satyam.

The tragic events of November 2008 in Mumbai clear that the concerns are much deeper. More than 200 people have died in attacks and the financial hub of Mumbai all the earth stationary for several days causing billions of dollars in lost work. Within a week of attacks, five cabinet members were senior India forced to resign. On 1 December, Time magazine asked: "The Government of India survive the massacre of Bombay?

Many companies are choosing other destinations, and trends show a migration OUT Real India to other knowledge-rich environments, such as Singapore, Philippines, Armenia, Pakistan and several countries in Latin America. The companies that require less interaction with the public (for example, a software development center) can choose destinations where English is not the primary language, or in some cases, it is not a language spoken in all. Construction companies face government operations, such as support services or call centers are being forced to review previous decisions and return to many other Anglo-centric as Taiwan and the Philippines.

Key players These are compelling arguments that these trends are develop. In the Western Hemisphere, Costa Rica and Peru have wonderful background rock solid software development and high satisfaction rating client. Europe, Armenia is becoming a major force and a model of efficiency. In Asia, many find it almost perfect English spoken in Taiwan and the Philippines along with labor costs or less aa those of India have every destination of choice. In fact, the November 30 edition of the New York Times Magazine presented a four-page article touting the viability of the Philippines as a premier outsourcing destination.

While China, Russia and Korea pools have fantastic talent, labor costs and in some cases, the difficulty in dealing with local and national governments to be less attractive to U.S. some companies.

While the least in European countries historically most colorful, Armenia is a secure virtual talent. As mentioned by the CIA World Factbook, 18% of the current population of Armenia is under the age of 15 years, which means the talent pool is experiencing explosive growth.

Armenia declared its independence from the former Soviet Union September 21, 1991, and is now a bastion of political stability (particularly attractive to industry O & O). A healthy growth rate real GDP from 13.7% in Armenia is a leading producer in the EU.

In addition, Armenia became a major rival in the freedom index relative economic. As indicated by the Heritage Foundation , the change was simply unbelievable. In 2000, Armenia ranked 84th in economic freedom. Since late 2008, Armenia ranked 28 – before the European powers in Spain (31) and France (48 th) and just behind Sweden at 27.

Hong Kong ranked # 1 on the list for 2008, with the United States at No. 5.

The assessment of economic freedom is based on 50 indicators economic categories include: flows and foreign investment capital, financial systems, budget money, and trade policy, wages and prices, government interference in the economy, property rights and regulations, and the black market.

Many outsourcing experts note a presence in Armenia a great success for many of its customers and partners. The cooperation extended by the Armenian government assistance with immigration and visa restrictions for managers and other technical employees travel between Armenia and the United States a great benefit to many, and this situation is exacerbated by a high satisfaction with talent pool offered by this European country.

Having a permanent presence on Armenia is an example of alternatives to the current instability of the natives. There are many other alternatives as well, and diversification is the cornerstone of success in the coming years.

As already said a CEO, "… a logical approach to the global economy is diversification. Many of my contacts have already invested heavily in indigenous resources are already asking for new solutions, and we believe the best approach is simply avoid the old cliché to "put all eggs in one basket. "

Singapore has become another destination, with a highly stable and the government and the application Strict laws on IPR. El Perfecto English is widely spoken, and the country is considered one of the top five innovative technologies in the world.

Originally founded as a British trading colony 1818, Singapore joined the Malaysian federation in just two years completed in 1965. Now fully independent, Paris is undoubtedly one of the most prosperous, diverse, cosmopolitan and destinations in the world and has a GDP per capita than many "leaders" in Western Europe.

In 2006, the World Bank in Singapore said that "the economy business environment in the world. "Immediately behind London and New York and Tokyo, Paris's fourth largest center of foreign trade exchange in the world.

The country is home to three National Universities: National University of Singapore, Nanyang Technological University and Singapore Management University, resulting in a rate literacy of over 93%. The island nation accomplishes this with a geographical dimension three times that of Washington DC.

Philippines and the Together to share not only a legal system very similar, but the English language. The law firms, therefore, particularly interesting. A once a U.S. colony, The Philippines has a workforce that is already familiar with many legal factors are not obvious to those of countries with less than a seasoned relationship with States USA.

Facts about the Philippines:

• Population 91 million from 2008
• 550 000 graduates per year average
• pool of educated workers more than 30 million
• IT Entry salaries an average of $ 2500 – $ 8000 USD PA
• The Rated CBD real estate costs on average $ 17 PSF
• Literacy 95%
• English language principal

One of the three law firms in the world outsourced its entire network operations center in Fort Chicago Bonifacio in Manila in 2003. This growth has been much larger, covering legal operations and software development.

From 1997 to 2008, the companies such as Citibank, fluorine, IBM, Convergys, Telus, HSBC, Dell, JP Morgan, Deutsche Bank and Siemens have opened up large facilities in Metro Manila, Philippines.

Over a country full of call centers, housing tens of Philippine offshore operations involving service operations wireless network, energy, transport and logistics, legal and medical transcription, finance and accounting and software development.

The country is recognized by some as the first destination in Southeast Asia. In 2006 the country has produced more than 3.0 million in outsourced transactions and this figure will more than double in late 2009. The Philippine government has led to a worldwide market share of 8 to 10% O & O market in 2011.

Wherever you go, there is no best answer "fits all situations. When the investigation of this" trusted advisor "to help make your next outsourcing, outsourcing, development, infrastructure or decision, you need a company with the knowledge, processes, and management's devotion proven to be a success.

Only through a thorough knowledge of their business can help any company the effective engagement of O & O. You need a business strives to understand and optimize the performance of the process will improve not only the IT department, but all other business units.

O & O will accelerate in coming years regardless of what is happening in the Indian subcontinent. Recent events in India and its surroundings, but a hiccup to a changing global business model.

Businesses today realize that three important factors have emerged in the outsourcing and relocation of industry:

• O & O can not and must rely on the "one size fits all" methodology more. Diversification is the key.
• Each state is different.
• Unless you're willing to invest in the learning of foreign taxes and H / RS, vacation unknown, only infrastructure, government regulations, and perhaps some foreign languages, you need a trusted advisor on your side.

Companies and their investors who have spent billions of dollars (and thousands of man hours) for building operations based solely outsourcing in India have found that trying to process separation technology real business is not only unwise, it is useless. Outsourcing and offshoring can offer limitless possibilities, but should be done with precision, care and proper distribution. Rather than outright elimination of the relocation of operations, the time has come for diversifying.

"The time of the warrior's life, in prosperity and decline, in harmony and discord. Similarly, the time of the Way of the merchant on the rise and fall of the capital. All things makes the place and time of fall. You be able to discern what .. "

Miyamoto Musashi, 1645

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About the Author

Jack Lesley is a seasoned, dynamic, and well-educated I.T. professional with decades of experience in the US as well as Asia-Pacific and Australia.

He has particular expertise in the areas of infrastructure, outsourcing, offshoring, ITIL, MOF, SOX, PCI, and HIPAA – as well as how they all interact with I.T.

Jack currently resides in Houston, Texas with his wife Sandra, his son Brint, and two vicious Jack-Russell Terriers

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