India: `The creativity out here is incredible!' 1703

On Sun, 23 Jul 2006, aj

here, you need to learn more about BPO failure rates, too:

Offshore outsourcing (i.e. BPO, especially to India) has a high failure rate and is leading to a new pheonmenon: backsourcing-backshoring, and the "H-1B swindle."

July 4, 2006 revision: Adds WSJ article at item #16

June 26, 2006 revision: Adds Business Week-Small Biz, Summer, 2006 report (see item #15)

June 12, 2006 revision: Adds BW article reference on Apple pulling out of India (see item #14)

June 6, 2006 revision: Adds one question (#4) about economic conditions in India and references (in item #13, below).

May 5, 2006 revision: Companies hiring foreigners on H1b visas are less interested in quality work and more interested in cheap labor (see item #12 below).

FAQ: QUESTION #1: How well is offshore outsourcing & BPO (especially to India) really working? ANSWER: Below are many different sources (1-11, 14-16) and many comments, summaries, and quotes that report that the failure rates are very high and satisfaction is not very high, either. Especially in reference # 10, it is clear that you don't get increased "productivity." Instead, when the cost goes down, so does the quality of what comes out.

QUESTION #2: Instead of offshoring jobs to, for example, India, US companies import foreign labor to the USA through a visa such as the H-1B which requires that the employee work only for the company that sponsors that visa and they justify this on a shortage of IT expertise in the USA. How true is this picture? ANSWER: Reference #12, below, is a source of information that H-1B employers are more interested in cheap labor than quality service or products.

QUESTION #3: Are there any anti-offshoring internet resources? ANSWER: See at the very end of this file, one website. If you know of any more, please send email to me or post to the newsgroups.

QUESTION #4: What BPO economic changes are currently being reported for India? ANSWER: See item #13, below. -------------------- 16. From WSJ, Monday, July 3, 2006, page B1, enbreastled "Siting a Call Center: Check Out the Mall First" by John Lyons.

Quote(p B3): "After Lehman Brothers moved its internal computer help desk to India in 2003, the mismatch between the investment bank's hard-charging employees and their new Indian phone-support agents created problems, say industry insiders, and the help desk returned in house."

It is also interesting that most of this article is about an Indian, Mr. Shankardbutt, a US citizen ("born to Indian parents in Nairobi, Kenya") who works for ClientLogic, that sets up call centers as an outsourcing business and most of the article is devoted to his work finding call center sites in Mexico.

-------------------- 15. From Business Week-Small Biz, Summer, 2006 (may be on the website: www.businessweek.com-smallbiz) enbreastled: "Here or There" subbreastle: Six entrepreneurs explain why they outsource or not. Here is a quote from the first page of the article (page 67):

"Some 24% of small manufacturers said they had purchased goods or services from vendors outside the U.S. in the past three years, according to a 2004 study by the National Federation of Independent Business. For the rest, the best place to manufacture is right at home, at least for now. The easy rapport with vendors, relatively short plane rides, and the quality of American-made goods keep these business owners and their customers perfectly happy."

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