The Hindu Business Line : `Outsourcing? Yes, jobs here, big gains to cos there'

AMIDST all the hue and cry in the US about companies outsourcing work to India, a study by Inductis, a management consulting firm, says that American companies save billions of dollars each year by outsourcing work to India.

The US banking industry alone saved $8 billion over the past four years by outsourcing work to India, according to the study done by Mr Arjun Saxena and Mr Lalit Wangikar of Inductis.

Also, the US -based multinationals have been the `biggest beneficiaries' of offshore outsourcing economies. For instance, GE alone saves over $ 350 million per year through 18,000 offshore employees.

"If it were an independent company, the Indian operations of GE would probably be worth around $ 12 billion - these are the benefits that flow directly to GE's consumers and shareholders in the US," Inductis, formed three years ago by former consultants from Mitchell Madison Group, said.

During 2000-2003, when Lucent, AT&T and other firms laid off more than 20,000 employees, the India-based IT and business process outsourcing (BPO) companies have been directly or indirectly responsible for creating over 10,000 highly paid jobsfor software developers, engineers and marketers.

Also, about 35 per cent beneficial ownership of Infosys shares is with US residents, Inductis said.

The consultancy is of the view that Indian technology industry should leverage on these facts to tide over the current backlash against outsourcing. The State of New Jersey has introduced a Bill seeking to restrict outsourcing.

The Indian industry should hence engage in conducting grassroots advertising campaigns highlighting these positive impacts of outsourcing and lobby with the Indian Government to pro-actively approach the World Trade Organisation.

Individually, Indian companies could forge sales and marketing partnerships with potential competitors, since such relations can provide access to a wider customer base, while retaining the offshore competitive advantage.

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