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India to expand outsourcing basket with new services
Wednesday, 26 November 2003, 20:30 IST
NEW DELHI: Long termed as the Mecca of technology outsourcing, India is seeking to expand its basket of back-office services by tapping opportunities in other industrial sectors like pharmaceuticals and finance.
Experts said Tuesday that India could become the preferred outsourcing destination for global pharmaceutical and financial services companies due to its low cost operations and vast base of qualified professionals.
"The framework of outsourcing has expanded dramatically in the last few years," said Chandra Srinivasan, chairman of management consultancy AT Kearney, while addressing a session on "India: The New Outsourcing Hub" at the India Economic Summit 2003.
The three-day summit, which ended Tuesday, was organised jointly by the World Economic Forum and Confederation of Indian Industry.
"The definition of outsourcing has changed dramatically and it is no wonder that many experts term it the next best thing happening to the Indian economy," Srinivasan told the Indian and global business delegates.
Michael Roux, vice chairman (Australia) of Citigroup, said India could emerge as a major global player in the outsourcing of financial services.
"India is not only doing things at cheaper cost but it is doing things better at cheaper cost. This is a major competitive edge the country has when it comes to outsourcing of financial services," said Roux.
India, which has carved a niche for itself in the global technology outsourcing market because of its abundant, high quality and cost effective pool of skilled workers, is fast emerging as the global hub for financial outsourcing jobs.
Investment banks like Morgan Stanley, Goldman Sachs Group and Citigroup Inc. are reportedly planning to ship research jobs to countries like India, where salaries for graduates are low compared to those in the U.S. and Britain.
According to a survey report, India has emerged as the preferred destination for relocation of over 500,000 jobs in the next five years by U.S. financial services firms.
The transfer of over 500,000 jobs represents eight percent of the U.S. financial sector's total workforce and will result in annual savings of $30 billion, said the survey conducted by global management consultancy major A.T. Kearney.
The survey ranks India as the best country overall for offshore business processing, followed by Canada, Brazil, Mexico, the Philippines, Hungary, Ireland, Czech Republic, Australia, Russia and China.
Until recently, U.S. offshore job transfers have primarily focused on back office functions such as data entry, transaction processing and account reconciliation.
Swati Piramal, chief scientific officer of pharmaceutical firm Nicholas Piramal India, said India had all the advantages to become a back-office research hub for pharmaceutical companies as well.
"We have all the ingredients in place. India has over 2,000 research institutes, robust IT backup and vast educated manpower base, among many other things," she said.
Piramal, however, noted that the government needed to do much more to facilitate the flow of back-office pharmaceutical jobs to India by way of removing some regulations that affect shipping of contracts into the country.
Villoo Morawala-Patell, chief executive officer of Avestha Gengraine Technologies, said India needed to focus on improving physical infrastructure and power supply to enhance the outsourcing industry.
"Although absence of good quality power and robust physical infrastructure are not show-stoppers, they definitely create hassles in managing business and it should be addressed at the earliest," he said.
Source: IANS
Source: IANS