Indian IT companies optimistic as Obama wins
By siliconindia   |   Friday, 07 November 2008, 00:29 IST   |    2 Comments
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Bangalore: Will Obama's views on bringing back jobs to U.S. affect Indian BPO and IT sectors? Though his comments before election were in the tone that he would not encourage any U.S. jobs moving out to the countries like India, analysts believe that it will be difficult, if not impossible, for him to do anything along those lines. And that it's essentially election rhetoric that will die down very soon, reported The Times of India. Som Mittal, chairman of IT industry body Nasscom believes that job loss concerns in U.S. are primarily those related to the manufacturing sector, especially in areas like Ohio and Detroit. "India's strengths in technology outsourcing will actually be a solution to their issue of reviving the economy. It will improve U.S. companies' competitiveness. Besides, there's a huge shortage of technology professionals in the U.S. We have met Obama's advisers, and they all have a good understanding of the benefits of outsourcing," he added. Some think the U.S. government cannot afford to take a U.S.-centric view on the issue. "For many large U.S. firms, almost 50 percent of their business comes from outside the U.S., where they have to compete with local companies. And to do that, they will have to take advantage of outsourcing," says Girish Paranjpe, joint CEO of Wipro. He estimates that U.S. companies save as much as 30-35 percent through the wage arbitrage and efficiency gains that outsourcing provides. S Nagarajan, COO of one of India's biggest BPO companies 24/7 Customer, believes the savings are between 40 percent and 60 percent, depending on the complexity of the task and the place from where the work is moving, whether an expensive Tier 1 U.S. city or a Tier II or III city. Technology research firm Gartner notes that several studies have found that the job loss due to offshore outsourcing is actually a very small percentage of the overall labor pool in the U.S., and not something that will have any perceptible direct impact on the U.S. economy. "Besides, Indian companies are now increasingly setting up campuses and a strong development presence in the U.S. itself (example, TCS in Cincinnati), bringing a greater balance between offshore and domestic sourcing," says Partha Iyengar, VP in Gartner.