Volume 17, Number 2 Article by Rajendra K Bandi and Vasanthi Srinivasan June, 2005
Jobs on the Move: De-localisation and Relocation of eWork Discussion :
Developments in Information and Communication Technologies (ICTs) have significantly challenged the importance of the place of work. The relocation of eWork has given rise to a new industry the IT enabled services BPO, and India has been a significant beneficiary of this phenomenon, presently topping the AT Kearney Offshore Attractiveness Index. However the growing success of this Indian industry raises questions about the quality and character of telemediated jobs, the forms, choices and motives of relocation, and the challenges of domestic relocation of eWork. The social consequences of such relocation, the patterns of employment and the cultural issues are the larger aspects that need to be examined. Can the initial success of the industry sustain itself? What is the policy, legislative and educational framework required to facilitate the process?
IIMB Management Review invited a distinguished panel of practitioners and academics to discuss the objectives, processes, and impact of relocation. The discussion was anchored by Profs R Bandi and Vasanthi Srinivasan of IIMB.
Prof R Bandi spoke about the Asian EMERGENCE Project, an ongoing project for the Estimation and Mapping of Employment Relocation in the Global Economy in the New Communication Environment, through 50 case studies across Asian countries. The project concluded that: global relocation is moving from an experimental to a consolidation phase; relocation is a continuous process and not a single hop; not all changes are driven by the demand side and the search for low cost is not the only driver. While the new eEmployment has not enriched the rural areas, it is also true that jobs do not always disappear when work is relocated. Prof Vasanthi Srinivasan presented an illustrative case from the Asian EMERGENCE Project in a bid to explain how the entire process of relocation works the motives of organisations on both sides, how they actually make it happen on a day to day basis, their review and evaluation processes, the enabling technologies and the effects of the relocation on employment and jobs.
Attracted by the low costs and high quality of work in India, Aviva began its 'steady but aggressive' offshoring journey. The insurance major chose the BOT buildoperate-transfer model, relying on a supplier's expertise to get buildings and set up operations and while sharing some risks with partners, over the body shopping, outsourcing and self-building models, revealed Sean Egan, Chief Operating Officer, Aviva Offshore Services. The lessons Aviva learnt in the process were that it was imperative to learn about cultural differences, bandwidth cost and legal structures. Constant research into every situation was important, as it was to have a values-fit with partners.
Elaborating on the drivers of BPO in India, R Mohan, CEO, Hinduja TMT, pointed out that while potential cost savings, the availability of manpower and telecom had given India the advantage and a bright future, the situation was far from sanguine. Our costs on salaries, operations and overheads are growing faster than increase in rates or prices and we must move up the value chain. While India might continue to be seen as a source of good practices, processes and a global delivery model, the delivery itself may be done in lower cost centres. BPO is considered too 'low brow' to be a career alternative. There is a lack of clarity on skill sets, a standard curriculum, focused training and certifications. There are no benchmarks for compensation and benefits, performance or HR policies. Telecom infrastructure is still inflexible and India lacks specific laws on privacy and data protection.
Madan Padaki, CEO, MeritTrac, provided insights into the talent pools in India. Currently, there is a clear divergence in industry expectations and academic orientations. IT and BPO clients are looking for enhanced skill sets with domain appreciation and teams that will integrate seamlessly across the world. On the supply side, despite India's fabled reputation of producing millions of graduates good at Maths and English, in a typical voice-based contact centre, the conversion rate today is 4% and 8% for IT companies. The long term imperatives include building a quality assurance mechanism rather than a quality control approach at the college level, creating awareness and training programmes, a co-opetitive approach in the industry with initiatives like devising a common test, and private-public partnership programmes where all the stakeholders industry, academia, the government, and training and assessment companies come together on a common platform.
Wg Cmdr Swaminath, National Chairman & Chief Functionary, ITPF India, spoke about the aims and activities of the IT Professionals Forum (ITPF), a notfor-profit, service-oriented association of IT professionals.
IIMB's Prof Rupa Chanda's dipped into the preliminary findings of her UNDP-funded study on the larger development implications of BPO in India, China and the Philippines. Concentrating on the macroeconomic and development dimensions of the industry Prof Chanda discussed the plusses and minuses of the industry. To harness the advantages, the thrust areas for domestic policies should be the development of human resources, labour market policies, physical infrastructure, appropriate regulatory and legal framework and e-governance issues. In the international arena, India is pushing for binding commitments in Mode 1 of the General Agreement on Trade and Services that covers offshore outsourcing, securing predictable market access and discussing e-commerce taxation, consumer protection, and liability issues in various international fora. India is actively pursuing regulatory frameworks on regional/bilateral bases with Singapore, the US, China and Japan.
Dispelling the common myths about domestic BPO that the domestic market is small and flat and that there are no established service providers was S Shyam Sunder, Director, Magus Customer Dialog. Growing at the rate of 50-60% per annum, the domestic BPO market is becoming increasingly quality conscious and we are headed towards consolidation of services in the domestic space. However, there are some issues that need to be sorted out. There is an acute lack of knowledge in the user industry as BPO companies do not invest adequately in user education. BP outsourcers fear a loss of control when they outsource and they tend to demand business on their terms. Moreover, the regulatory environment towards the domestic market is 'step-motherly' and there is limited financing of resources and investment in technology.
Reprint No 05206a
