Tuesday, January 31, 2006

Back Office of the World - Part 1

Somebody in business world had once quoted "Just as China has qualified to be called the Manufacturing base of the world, it is India that is emerging as the Back Office of the world". Quite on the mark, my friend. Business Process Outsourcing centers ( BPOs )or Call centers, as they are called in the common parlance, dot the premier cities/towns across India. They form the second major division of the IT sector after the software companies.

And what do they do ? One thing for sure. Take calls from around the world and provide solutions to customers of the major corporations across the globe. The services they offer over phone vary according to what the corporation which has outsourced work offshore, does chiefly. Call centers catering to Toyota might be helping Toyota customers in the U.S. get road side assistance. Call centers catering to Hersheys chocolates might be providing nutrition information to concerned customers. Call centers serving Apple computers might be assisting a customer to get his IPod working. Well, the possibilities are limitless. And so are the job opportunities. The information technology market in India is flooded with them.

That brings to the mind two questions.

1. Where from are the jobs flowing to India?

Should be an easy one if you keep tabs on world economy news avidly. Jobs are flowing in from America and the European bloc chiefly due to intense competition among companies. The economic slowdown in these economic powerhouses has been forcing CEOs to indulge in cost cutting measures. And most importantly the currency strength of these countries vis-a-vis the Indian rupee has been key factor. Contributing factors definitely have been the huge English speaking youth work force available in India and the tremendous strides that the world has taken in the sphere of telecommunications and digitization. India has utilized the opportunity to the hilt. To sum it up, it is harnessing all the back office jobs* that form a major chunk of all big corporations and companies.

2. What effect are these new job opportunities having on India?

This one is more interesting. The macro effect is the flow of wealth from the richer pockets of the globe to India. This in turn has led to the emergence of the burgeoning middle class in India with greater purchasing power.

The micro effects are discernible only on a closer look. Educated Indians with a even a smatter of English are moving away from the traditional low paying jobs in rural and semi-urban areas to the metros to get into a call center job that pays 10-15 times more. To quote one example, my Dad who is an educational consultant keeps mentioning, "The chief complaint in almost all the schools I visit these days in non-metro towns is the lack of good English teachers. They are all moving to Bangalore where they easily get into a call center job". I persisted,"What about the teachers who have spent several years in the job. They definitely will stick around ...". He quickly cut me short,"No, Not even them !!! After having worked for years for a measly 2000 or 3000 Rupees a month, these call center jobs are providing them the much needed economic respite". I was speechless. My mind had already raced to the question of whether we are placing the future of Indian kids at the sacrificial altar of greater immediate economic gain ? Only time can tell.

Coming back, it is quite easy to see how potent an economic factor offshore outsourcing** is turning out to be in a developing nation like India. Though the benefits of BPOs cannot be undermined, attention needs to be focussed on how to address the imbalances created as a result of a new player on the Indian economic stage.

More on the socio-political-cultural effects of offshore outsourcing in next part in this series.


*Back Office Jobs - Jobs that do not require huge knowledge skills and do not bring in major revenue to companies, yet form critical segment of corporations striving for customer delight.

**Offshore Outsourcing - The process of moving back office jobs not just outside the company ( outsourcing ) but also out of the region ( read 'outside country' or off-the-shore of one's own country ) to some other region where it can be done at a cheaper rate.

1 comment:

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