CIO Mag: Pros and Cons of India Outsourcing

by Brandi Moore on November 18, 2007

This is the question CIO magazine puts through the paces this month with two articles; one focusing on the upside of India and one focusing on the down side.

I think before I write: glass half full or glass half empty?  I am not convinced by the arguments laid out in the half full article.  India is a great place to send your customer service and back office tasks.  Great.  Pretty sure most of the world already knows that.  The author offers little else for us to consume. The cons articles is much more interesting and I pulled the tidbits of interest here. You can read the feature yourself: Half Full / Half Empty

1.) The NEED for an in-country project manager that understands India’s culture to help move the project along.  This is identified as a need for successful projects but is also identified as a big problem because these types of people are not available.  I have already talked about this in other posts.

2.) Infrastructure. I am really starting to wonder when India is going to wake up and do something about their infrastructure.  Its the pits.  Really.  I have profiled other groups here who are living with infrastructure issues that impact their delivery of goods to market.  This piece does not speak to that problem, rather they complain about how long it takes to traverse Bangalore or get to the airport. So, in essence the infrastructure is starting to hit executives where it really matters: the time column.  China is outspending India 7 to 1 in this area.  How long will it take India to make changes?

3.) The Raging Rupee.  This article claims the recent dollar to rupee exchange has “has eroded about 11 percent of the dollar’s purchasing power in India”  Yikes.  11% is a big number.  Firms are currently absorbing this cost but its expected that times will change in the coming months.  Previous hours that were not billed out will be…and contract negotiations will not be pretty.

4.) Rising alternatives.  The author talks about India “Fatigue” and the availability of workers in other places such as Eastern Europe, Mexico, Latin America, Middle East etc… However, I believe they are missing the point of globalization, which is SPEED.  SPEED is gained by having multiple working on the same problem across multiple time zones.

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