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UK thumbs up outsourcing
16th September 2005
The discrepancy in the US and UK reactions towards the Indian outsourcing industry has been quite conspicuous. While the US has
shouted itself hoarse against outsourcing, UK has managed a dignified approach by analysing the pros and cons of outsourcing
before accepting or rejecting it completely. Belying the traditional backlash against outsourcing to India, it has expressed its support
towards the industry. Though trade unions have opposed the job-shifts to India, companies have unceasingly reaped cost
advantages of about 30-70% by outsourcing operations to India. The decisions have unanimously echoed cost cutting and underlined
efforts to remain competitive in the market. The trend has been witnessed across various industries such as banking, telecom,
insurance, IT, airlines and retail.
Rather than treating outsourcing as just another menace that needs to be curbed, the industry and the government have gotten their
act together to leverage the advantages in favour of Britain. Companies that have shifted their call centres to India have created more
high-end jobs in their own country. Tesco, the supermarket chain shifted about 350 IT and business support jobs to India. This
announcement was followed up with its promise of creating over 13, 000 jobs in the UK through expansion and other measures in its
retail and telecom units.
Digby Jones, the Director General of Confederation of British Industries, stated that the British economy gained approximately £16
billion in 2004 on account of offshoring. According to NASSCOM 2004 estimates, about 250,000 UK citizens will lose their jobs to
Indian shores, costing the government about £5.7 billion, which is much less compared to the costs of not outsourcing- a staggering
£34 billion. Other facts that have removed the stigma attached to the BPO include employment statistics, which indicate that the
growth in the number of jobs in UK's call centre industry is thrice that of the national average.
The outsourcing industry received a great boost when the Prime Minister of UK, Tony Blair, during his recent visit to India, hailed the
contribution of the BPO industry to the economy and the performance of the companies and reiterated its importance to cut costs
and remain competitive in the market. With Western Europe expected to contribute about 22% to global outsourcing, the positive
outlook will be a boon for India.
The bug catches on…
Software testing was never seen as a lucrative career option - until the boom in outsourcing software testing caught on. But now,
software professionals, armed with scientific tools and techniques and the latest technology are taking to the testing field in large
numbers.
Companies such as Infosys (INFY), TCS and Wipro (WIT) once started testing facilities to aid their in house software development.
But as more and more Western software products are being outsourced to get de-bugged and validated, companies have started
specialized software testing centers. Apart from the Indian IT giants, several niche players such as AmitySoft, SNS, Veritas, Mercury
and RelQ have been offering high-tech testing facilities, often in specialized domains such as banking and financial services.
Outsourcing software testing has proved to be a blessing for software development companies who struggle to meet client deadlines
and face shrinking time-to-markets. Some experts say at least 30% of development time must be dedicated to software testing, but
that rarely happens. Estimates in 2004 by the US Department of Commerce suggest that software bugs cost $59.5 billion to the US
economy.
Global software developers are expected to spend somewhere around $13 billion in 2004 on outsourced testing. And India, with its
latent pool of qualified testers is fast leaving behind Russia, China and Ireland in the destinations' race. With about $2 billion worth of
business expected to come to India, the industry is roaring to scale up.
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