Monthly archives: January 2004

The US senate has not stopped, they are finding the more effiecient and the wholesome ways to crack outsourcing.
Anti-BPO moves: Worse yet to come – Times of India :

* Bill, called “Truthfulness, Responsibility and Accountability in Contracting Act of 2003″ (TRAC Act), introduced in the US Senate last year, could halt outsourcing by the entire federal government, if it becomes law.

The objective of the TRAC Bill is “to ensure that the business of the federal government is conducted in the public interest and in a manner that provides for public accountability, efficient delivery of services, reasonable cost savings, and prevention of unwarranted Government expenses, and for other purposes”.

The TRAC Bill refers to outsourcing as one of the components of “contracting out” which will be monitored by the General Accounting Office (GAO). The new Bill says that certifying agencies will have to be formed in each department to monitor all projects contracted out.

These agencies will have to report to the GAO that the procedures followed for outsourcing are fair and transparent. These procedures have been put in place to make outsourcing as difficult as possible. *

Related:

* Americans don’t know what BPO is

* Who are Outsourcing to India?

The American reality from Wired.com:

* A century ago, 40 percent of Americans worked on farms. Today, the farm sector employs about 3 percent of our workforce. But our agriculture economy still outproduces all but two countries. Fifty years ago, most of the US labor force worked in factories. Today, only about 14 percent is in manufacturing. But we’ve still got the largest manufacturing economy in the world – worth about $1.9 trillion in 2002. We’ve seen this movie before – and it’s always had a happy ending. The only difference this time is that the protagonists are forging pixels instead of steel. And accountants, financial analysts, and other number crunchers, prepare for your close-up. Your jobs are next. After all, to export sneakers or sweatshirts, companies need an intercontinental supply chain. To export software or spreadsheets, somebody just needs to hit Return.

What makes this latest upheaval so disorienting for Americans is its speed. Agriculture jobs provided decent livelihoods for at least 80 years before the rules changed and working in the factory became the norm. Those industrial jobs endured for some 40 years before the twin pressures of cheap competition overseas and labor-saving automation at home rewrote the rules again. IT jobs – the kind of high-skill knowledge work that was supposed to be our future – are facing the same sort of realignment after only 20 years or so. The upheaval is occurring not across generations, but within individual careers. The rules are being rewritten while people are still playing the game. And that seems unjust.

Couple those changed rules with the ham-fisted public relations of the American companies doing the outsourcing and it’s understandable why programmers are so pissed. It makes sense that they’re lashing out at the H1-B and L-1 visas. US immigration policies are a proxy for forces that are harder to identify and combat. It’s easier to attack visible laws than it is to restrain the invisible hand. To be sure, many of these policies, especially the L-1, have been abused. American programmers have done an effective job of highlighting these abuses – and during an election year, Congress will likely enact some reforms. But even if these visa programs were eliminated altogether, not much would change in the long run. *

[The New Face of the Silicon Age: Page.4]

[ Through : Anand] A WIRED.com article – The New Face of the Silicon AgeHow India became the capital of the computing revolution and SLASHDOT.com discussion -A Thoughtful Look at Indian Outsourcing and last and the least, my explaination over heated sentiments on slashdot.

SNAPSHOTS:

* “Why continue to argue about it, just don’t do business with companies that outsource to India. ” *

* There is virtually nothing anyone can do about outsourcing – and the fast developing intellectual capital resources of the rest of the world – that will insulate American workers, with the exception of regressive protectionism (which will result in an even worse situation). *

* In fact, *anyone* who’s occupation does not *require* face-to-face contact
is at risk of displacement, long-term.

The next big ‘thing’ will be social entrepreneurial plays that bring social
and fiscal efficiencies into mature capitalism, on a large scale. Also,
people will learn – in general, and long-term – to be happy with somewhat
more limited material horizons (and probably enjoy life more). This is as
plain as day, and already in the cards.

Politicians will not/cannot do anything to abate the outsourcing trend. Why?
Because capital is “on the wire”, and doesn’t know national boundaries any
longer. Corporations answer only to fiscal mandates, created by law. Game over!

So, say “ta-ta” to the gravy train; let’s learn to optimize our intellectual and social capital, learn to cooperate (intra- and inter-nationally), and become creatively and commercially fierce (like the rest of the world). *

* In any case us western countries have had the lion’s share of the distribution of wealth for far too long at the expense of poorer nations. I don’t think we have the right to complain if an Indian coder takes our job. *

* India has some of the highest import tarrifs in the world, local content laws, and property ownership laws. *

Related discussion on slashdot :
* Do You Make $60/hr for Programming?

Open Source is not free and we don’t come cheap

Microsoft and collaboration suggests that Linux and opensource is afterall COSTLY.

In fact, over the years a branch of that open source Unix, called Linux, spread its market share (mainly at the cost of Unix) and Microsoft has grudgingly begun to acknowledge its power. But as some of the companies present at the Friday’s Microsoft meeting–NDPL, Goderj, CDSL and Pacsoft Solutions–indicated that it is too much of a bother to have “eventually costly” open source and it was best to work with Microsoft. They listed how they faced difficulties working on Unix/Linux and losing their mails or getting them “after 22 days” and how their lives have been changed for the better by getting back to Microsoft products.

On the other hand they are opening up their source code under Microsoft’s Government Security Program (GSP).

Microsoft and everybody else should understand the basic defination “FREE AS IN FREEDOM NOT IN PRICE”. Did you get it dudes?.

Even though The Wall Street feels that the outsourcing is a good business:

["In the 1980s, many people boycotted companies that did business with the apartheid regime in South Africa," Kirwin said. "Many of those same people have more money on Tuesday and don't like doing business with companies from countries that work against US politically, like France, or economically, like India and China. Consumer activism is an important part of putting the brakes on the outsourcing movement." ]

On the other hand, US introduces a bill to ban outsourcing. Would it be the same, if votes were outsourced?. Could this be indo-american cold war.

The World Economic Forum in Davos , Switzerland , has revealed that the export of Information Technology and other hi-tech jobs to India , China and Brazil and manufacturing jobs to countries like Mexico is shaking faith in globalisation even among its most fervent advocates.

However there can be a bright side to this :

[ there could be an upside to this imbroglio; leading Indian IT companies, most of which are sitting on huge cash piles, will now be forced to be far more aggressive in acquiring US and European IT companies. "We must continue to move up the value chain and evolve such solutions and services which are good and cost-effective, and Indian IT companies must diversify to other markets," said IT minister Arun Shourie. Experts agree that Shourie's advice is the only suitable long-term solution to combat this phenomenon. "Now they have to aggressively become truly global players instead of thinking in terms of exports from India," said Vaibhav Parikh, a BPO and intellectual property expert.]

Last but not the least, International Herald Tribune Reports that, not only jobs but even executives are heading for india

A new report by Zelos Group attempts to debunk what it says are “myths”about offshoring call centers.

“”The report Business Process Outsourcing: Focus on India that compares cost between onshore and offshore outsourcing, says, contrary to belief that outsourcing is only for large firms, that a global sourcing strategy can be effective for companies with sales of less than $200 million.

Answering concerns about agent quality Zelos found Indian call center agents possess the same (if not higher) quality as American call center agents. Indian call center employees all possess quality, college-level educations and were highly motivated to excel at their jobs.

Also top level bureaus offer effective accent-neutralization classes. In many cases, an accent is not detectable.

The Zelos paper asserts that call centers and other outsourcing operations moving to India will help the country become more stable.”"” More on CommWeb…
US is witnessing reduction in jobs but well known economists have different say on that but anti-outsourcing and anti-india sentiments are so sharp that (again) you can see protest against Nasscom. Even if someone says it is a myth.

The government’s Central Board of Direct Taxes (CBDT) has introduced a circular aimed at taxation of Business Process Outsourcing (BPO) units in India. This beautiful document is open for interpretations and hence the confusion rules and lawyers will have fun. After Telecom Soap Opera and Unfied License, the fun doesn’t end here, government ensures that we keep ‘shining’ through litigations.However Shantanu Rudra, Chief Financial Officer of Daksh eServices feels that, the new tax on BPO outfits has created confusion, but it is unlikely to affect growth of India’s $2.3 billion outsourcing industry.

Channel News Asia reports – India to keep lion’s share of global outsourcing business .

According to our conservative estimates, India enjoyed a 60 percent share of the international offshore call centre business in 2002,” Evan Kirchheimer, analyst with British research group Datamonitor, told an outsourcing conference in New Delhi this week.

“That will go down to 52 percent in 2007 as South Korea, China, Mexico and South Africa make inroads into the business,” he said at the conference, called “Contact Centre India” and attended by over 200 foreign company representatives.

“But there is no doubt that India will continue to be the biggest supplier of offshore call centres and enjoy a lion’s share of the business,” he said.

A leading American information technology expert and iGATE Global Solutions director Ed Yourdon on Tuesday said the “next big thing” may emerge from India.

Peter Drucker, an eminent American economist, who had predicted in the early fifties how computer technology would one day thoroughly transform business, has said India is becoming a powerhouse very fast.

“The medical school in New Delhi is now perhaps the best in the world. And the technical graduates of the Indian Institute of Information Technology in Bangalore are as good as any in the world. Also India has 150 million people for whom English is their main language. So India is indeed becoming a knowledge centre,” said the 94-year-old guru Peter Drucker in an interview to the latest issue of Fortune magazine.