Leading German software producer to shift work to India

Thursday, 02 December 2004, 20:30 IST
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BERLIN: A leading German software producer is shifting part of its internal IT services to India. The Walldorf, south Germany-based SAP, which already maintains business ties with India, announced that it was going to move its non-commercial services, including the maintenance of its house-produced software solutions, training systems and electronic marketplaces, to a vendor in India. In summer this year, it had announced that it would be hiring some 1,900 programmers at its Bangalore site by the end of 2006 in an effort to double its development capacity. Also, the company is planning to increase the staff at its Bangalore office to meet the increased demand for its software and hosting activities. The spokesman emphasized that the company was still in the "process of selection" and a final decision about identifying a suitable vendor will be taken early next year. However, the vendor company will probably be located in or near Bangalore, where most of SAP's operations in India are concentrated. The shifting will involve a total of 200 functions, including application administration and updates for a part of the systems that had been maintained by SAP employees so far. While SAP will continue to operate the hardware, Indian systems administrators will be performing the SAP operations in the future. As in the US, outsourcing to India has also become an issue for German workers and trade unions, which can only envision loss of jobs whenever their employers resort to outsourcing. The shifting of the work to India would affect 70 jobs in the St.Leon-Rot region. However, an SAP spokesman emphasized that none of the workers will lose their jobs. Some 20 of these workers will be assigned other tasks while the remaining 50 will assume what the German company described as "strategic and advisory" functions. When asked how much savings the company would effect by resorting to outsourcing, the spokesman evaded the question and merely said that the objective behind outsourcing to India was to "do justice to the increased demands addressed to the company's internal IT services". The company is apparently under tremendous pressure to cut IT and administrative costs. This exercise will continue in the coming year as well. But India is not the only country where SAP is moving its operations. In October SAP had announced that it was shifting a part of its administrative work such as salary and wages as well as processing of travel costs to the separation-seeking Russian republic of Chechnya.
Source: IANS
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