Archive for December, 2010
The first decade of the 21st century is over. So how did outsourcing fare ?
Since so much of what we do consists of looking at trends, here are some of the top of the hat trends that breezed around and then hung like a fog over the decade.
1. Black-swans and wormhole wizards – And I’m not just referring to the Joe Satriani album, I’m including Taleb and the princess of magic, Ms. Rowling here. I know she made her BIG DEBUT last decade but tell me really, when did you read about wizarding wormholes, actually?
This decade’s real black swan was the GEC (to the uninitiated global economic crisis, or slowdown rather as they like to call it) – What a blimp that was – is .. Whatever.
Having recently watched Michael Moore’s Capitalism my understanding of what “they” did is further enriched, I also understand that it was ‘just waiting to happen’. For those in the banking, finance and related sectors or trade, industrial, outsourcing, manufacturing, transport, practically every sector, the impact of this slowdown has been pretty evident. Job markets dried up, pay scales went down or at best remained stagnant, layoffs, and cost cut backs- basically we all cleaned up our acts. Perhaps in a way it was a good shake and wake up, for a price naturally.
Outsourcing by and large stayed gung ho – more cost cuts equals more outsourcing right? Though at peak crisis time the industry did look a little like a wet dog, but by now they’ve managed to shake off the excess and emerge clean and shiny-ish.
2. The decade from Hell – That’s what TIME magazine called it in 2009- what with terror attacks, two terms of GW Bush, the great big Fannie Mae / Freddie Mac and subsequent housing fiasco– it’s no wonder that Americans are really tired. Well, that and no more MJ, the junior Elvis and only bigger actually – globally and in terms of being BAD.
3. Ice Age: Dawn of the Dinosaurs (and Avatar) – I’m referring to Climate Change here, there everywhere as it seems now. As Carlos Saldhana tried so hard to yell from the rafters – guys, the ice is melting. As a country that provides such a large chunk in the pie of outsourced services, more emissions are being blown out of Indian industrial chimneys and as yet more natural resources deplete, tipping the balance of yet more natural ecosystems though the average Indian still doesn’t give a hey about the phenomenon. But excuse me Mr Pandit, your Ganges is turning grey and the ice on the shivlinga black. (Although we know of a certain Mr Pandit who would love having the cit(i)y ‘turning black’ now ! )
Meanwhile countries like UK are happy to have the ‘illusion’ of reduced emissions though in fact these are more of outsourced emissions. (Sigh), global warming indeed, is an ugly word.
4. Rise of the Asian tiger(s) – More than ever before, China and India have arrived. It is interesting to know just how important a part outsourcing plays in this context. The Indian outsourcing industry which draws annual revenues in excess of USD 11 bn accounts to 40% of global outsourcing market. At the peak of the 2008-2009 financial slowdown, China alone generated a revenue of USD 2.59 billion (for Q1/2009).
5. Technology – Technology – Ten years back, cloud was a fuzzy misty condensation in the sky. Social network – meant the weekly meet up with friends and Android was just another robot that featured in many sci-fi Hollywood action flicks.
Through all the technological advancement that is taking shape, ‘borderless outsourcing’ is now easily possible. As a circular effect of the phenomenon new career avenues are opening up, Social Architect … and you can prepare yourself at the ‘Social Media Academy’.. well why not , there is also the ‘BPO Certification Institute’ and BPO Management has now become a specialized branch, which means that probably ‘undergrad. with good English’ will not last long.
In all, this has been a good decade for the outsourcing industry! There’s more happening, all over, newer countries, consolidation, specialisation, cost savings, revenues, technology development, breaking down barriers and crossing new frontiers.
Outsourcing jobs to more cost effective locations does hurt someone though – the one who’s job was lost in the first place. In countries where a large amount of offshoring has taken place, like the US and the UK there is strong public sentiment against outsourcing , (more so offshoring) and there are a few states in the US that have actually passed laws that prevent offshoring- however, the ‘good for long term and for the greater economy’ principle prevailing dwarfs this opinion. In conclusion even for those that consider outsourcing negative, it has proven itself to be a ‘necessary (if not lesser) evil’ and the world has come to terms with that. Industry participants, buyers or suppliers however have a different story to tell.
Business Process Re-engineering is a savvy way of bringing back the job that was outsourced in the first place, the company is happy first that its cutting back on costs, the supplier is happy because ‘he got the deal’, the supplier is then very happy that he’s getting the work done at a faster, cost effective pace. The supplier is happy that the BPO/KPO employee is getting a value addition across the learning curve and is making money in the process. The when the job goes back, the buyer firm is happy that a ‘process’ has been set which allows one person the do the job of three for a far lesser value than earlier employed. The vendor is happy to consult on a periodic basis, and a pre agreed price. Employees on both sides are now happy – and the shareholder, the supreme, is so happy that benefits have been passed all along! What more could you want from!