The Hindu Business Line : Outsource or perish!

OUTSOURCING is being viewed by politicians, legislators, media and the public in the US as an unmitigated evil. Even academics who ought to know better have been denouncing it as the cause of layoffs of American personnel by corporates and erosion of growth prospects in that country. Some States have passed or proposed laws banning outsourcing, and the US Congress too is reportedly seized of the issue.

The reaction among businesses there is, however, muted because in the experience of many of them, outsourcing leads to enormous savings. It made the Citigroup richer by $35 billion during the last five years, catapulting it to the position of the world's most profitable company. GE too raked in $340 million a year thanks to outsourcing in India. In general, savings soared by 80 per cent for several US companies when they took the same route. Savings of the order of $138 billion have been projected for the top 100 financial service companies in the US from off-shore outsourcing.

It is a happy augury that some forward-looking and influential exponents in the US are already hard at work in selling outsourcing as a necessary and lucrative business strategy. Prominent among them is Managing Across Cultures, an international collaboration and cross-cultural management consulting firm, headed by Dr Zareen Karanji Araoz who is also the Founder Director and Professor of International Studies and Inter-Cultural Relations at Lesley University. She has been giving a strong and persuasive call for outsourcing by demolishing all the arguments against it by cogent and irrefutable reasoning. The pith of her case is that outsourcing leads to an expansion, and not shrinkage, of job market for Americans, helps businesses remain competitive, makes goods available at cheaper rates to US consumers and enables the US to maintain its supremacy in the global market place. It is prudent, she says, for the US not to antagonise businesses and governments in India by attempts to sabotage outsourcing. She warns that any Senator proposing a Bill against outsourcing should be held responsible for ringing the death-knell of the US economy.

As yet, there have been no concerted or sustained efforts by the Indian business community, through their chambers of commerce and industry and spokespersons (Messrs. Narayana Murthy, Azim Premji, Ratan Tata, for example) who command high respect world-wide to educate public opinion in industrial countries and erase the negative impression prevalent against outsourcing. The Government too has not geared itself to launch a campaign to highlight its advantages in a convincing manner. Any complacency on this score carries with it the great danger of the prejudice getting strengthened and India being deprived of the tremendous gains that had been flowing its way.

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