The Hindu Business Line : `Outsourcing services moving beyond back office'

Success story
In December 2006, Mumbai-based Tech Mahindra won India's biggest outsourcing deal to date.
While the deal underscores India's rapid ascent in global business, it also signals a transition for the world's `back office'.

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Mumbai Feb. 17 The country's outsourcing industry seems to be moving beyond familiar terrain and scaling new horizons, says a special report from the Wharton and Boston Consulting Group, in its assessment of the country's growth in the knowledge process outsourcing (KPO) segment, among other things.

The industry has achieved a critical mass and is moving beyond transaction-intensive services such as call-centre support or check processing, in its quest for providing KPO services where skills, judgment and discretion are the tools.

Major deal

In December 2006, Mumbai-based Tech Mahindra won India's biggest outsourcing deal to date — a five-year, $1 billion contract from British Telecom to provide technical support. While the deal underscores India's rapid ascent in global business, it also signals a transition for the world's `back office' from its current status as a provider of data processors and call-centre workers to its new role in outsourcing high-end, knowledge-based skills, the report says, illustrating its point.

The Indian outsourcing services industry helps its clients save $1.5 billion annually. GE alone saves more than $350 million annually after off-shoring about 900 different processes to India, the report says.

Forays

Besides looking at India's attempts to overcome "bumpy" problems with power and infrastructure, the report also looks at the country's forays into global manufacturing.

Over the last five years, India has increasingly begun to play a major role in global manufacturing.

This has been driven by a domestic market of low-cost workers with advanced technical skills, leading multinationals to set up manufacturing operations in India.

Ford, Hyundai and Suzuki export cars from India in significant numbers. LG, Motorola and Nokia either make handsets in India or have plans to start, with a sizeable share of production being exported.

Some globally competitive Indian manufacturing companies, in the automobile industry for instance, have got into the global supply chain.

Sundram Fasteners makes generator caps for General Motors.

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