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Indian Technology/IT News - Guest - 09-10-2003

[url=""]MS settles down in Hyderabad facility[/url]


Indian Technology/IT News - Guest - 09-15-2003

Michael Jordan (EDS head honcho) plans to triple the number of Indian workers to 3,500 by the end of next year in Forbes dated Sept 29 '03.


Indian Technology/IT News - Guest - 09-15-2003

<img src='<#EMO_DIR#>/smile.gif' class='bbc_emoticon' alt='Smile' /> use


<table width="100%" cellpadding="1" cellspacing="0" border="0">

<tr align="center" bgcolor="#B1851A" valign="top">

<td class="white" colspan="4"><b>Qualified workers available, per year</b></td>



<td bgcolor="#000000" colspan="4" height="1"></td>


<tr align="center" valign="top">

<td bgcolor="#E8D9BA"><b>Mumbai</b></td>

<td bgcolor="#DAC286"><b>Manila</b> </td>

<td bgcolor="#E8D9BA"><b>Kuala Lumpur</b> </td>

<td bgcolor="#DAC286"><b>Shanghai</b> </td>


<tr align="center" valign="top">

<td bgcolor="#E8D9BA">India</td>

<td bgcolor="#DAC286">Philippines</td>

<td bgcolor="#E8D9BA">Malaysia</td>

<td bgcolor="#DAC286">China</td>



<td bgcolor="#000000" colspan="4" height="1"></td>


<tr align="center" valign="top">

<td colspan="4"><b>Customer call center</b></td>



<td bgcolor="#000000" colspan="4" height="1"></td>


<tr align="center" valign="top">

<td bgcolor="#E8D9BA">35,000-45,000</td>

<td bgcolor="#DAC286">9,000-11,000</td>

<td bgcolor="#E8D9BA">6,000-7,000</td>

<td bgcolor="#DAC286">6,000-7,000</td>


<tr align="center" valign="top">

<td bgcolor="#E8D9BA">$1.50/hr</td>

<td bgcolor="#DAC286">$1.47/hr</td>

<td bgcolor="#E8D9BA">$2.19/hr</td>

<td bgcolor="#DAC286">$2.50/hr</td>



<td bgcolor="#000000" colspan="4" height="1"></td>


<tr align="center" valign="top">

<td colspan="4"><b>Back-office finance and accounting</b></td>



<td bgcolor="#000000" colspan="4" height="1"></td>


<tr align="center" valign="top">

<td bgcolor="#E8D9BA">14,000-17,000</td>

<td bgcolor="#DAC286">9,000-11,000</td>

<td bgcolor="#E8D9BA">7,000-9,000</td>

<td bgcolor="#DAC286">12,000-15,000</td>


<tr align="center" valign="top">

<td bgcolor="#E8D9BA">$1.35/hr</td>

<td bgcolor="#DAC286">$1.73/hr</td>

<td bgcolor="#E8D9BA">$1.86/hr</td>

<td bgcolor="#DAC286">$2.03/hr</td>



<td bgcolor="#000000" colspan="4" height="1"></td>


<tr align="center" valign="top">

<td colspan="4"><b>Electronic document conversion</b></td>



<td bgcolor="#000000" colspan="4" height="1"></td>


<tr align="center" valign="top">

<td bgcolor="#E8D9BA">110,000-140,000</td>

<td bgcolor="#DAC286">11,000-14,000</td>

<td bgcolor="#E8D9BA">20,000-25,000</td>

<td bgcolor="#DAC286">18,000-23,000</td>


<tr align="center" valign="top">

<td bgcolor="#E8D9BA">70 cents -$1/hr</td>

<td bgcolor="#DAC286">$1.07/hr</td>

<td bgcolor="#E8D9BA">$1.47/hr</td>

<td bgcolor="#DAC286">$1.50/hr</td>



<td bgcolor="#000000" colspan="4" height="1"></td>



<td class="footnotetxt" colspan="4"><i>Source: McKinsey & Co.</i></td>



Indian Technology/IT News - Guest - 09-20-2003

[url=""]ISRO's new face[/url]

There is good reason why the President of India will never forget G Madhavan Nair, the new chairman of the Indian Space Research Organisation. And it has nothing to do with international relations or missiles or defence.

The reason, quite simply, is that A P J Abdul Kalam (seen in photograph with Nair) was Nair's first boss. Both Kalam and Nair then worked at the Vikram Sarabhai Space Centre in Thiruvananthapuram. Today, Nair is the Centre's director. He has also taken over from Dr Krishnaswamy Kasturirangan as chairman of the Space Commission; secretary, department of space, Government of India; and chairman, ISRO.

Dr Kasturirangan was to retire from the last of his numerous extensions of service only next month. By that time, his successor would have been chosen and his appointment cleared by the Cabinet sub-committee. But Dr Kasturirangan was nominated to the Rajya Sabha by President Kalam on August 27. As soon he accepted the nomination, he was instantly relieved of his post at ISRO -- a government employee cannot hold political office and Dr Kasturirangan was to begin his term the same day.

Nair was appointed chairman of ISRO, but the Cabinet sub-committee is yet to approve the appointment. In the meanwhile, Nair continues to be director, VSSC, with the 'additional charge' of heading ISRO. As a result, he is reluctant to talk to the media about his plans for the future. Other senior ISRO scientists who have known him for years are also unwilling to share their insights into the mind of ISRO's new chairman.

Nair, who lived in Kerala all through his 35-year tenure with ISRO, will now shift to Bangalore, to the spacious new house that ISRO has built for its chairman. Nair's wife Radha also works for ISRO; she is a senior scientist at VSSC and is due to retire in December. Nair himself is due to retire from ISRO on October 31 when he turns 60. He will actually begin his tenure as chairman on an extension of service.

The fact that Nair was chosen to head ISRO is a break from tradition in many ways. It is after a long time that a scientist not currently based in Bangalore has been named chairman. It is also the first time in two decades that a scientist not working on satellites -- Nair specialises in rockets and launch vehicles -- has been chosen. Both U R Rao and Kasturirangan were directors of the ISRO Satellite Centre in Bangalore before they took over as ISRO chairmen.

Besides, it is rare for a scientist without a doctorate to be chosen to head ISRO. Nair's elevation to the post has improved morale considerably at ISRO; his selection seemed to underline that knowledge and work experience are more important than degrees on paper.

Nair was one of ISRO's early recruits. He joined the space programme in 1967, after being trained at Mumbai's Bhabha Atomic Research Centre. After graduating in engineering from Kerala University in 1966, he joined the Thumba Equatorial Rocket Launching Station, as VSSC was then known, in 1967.

Nair had been recruited by Vikram Sarabhai's protégé, R Aravamudan, now a distinguished scientist with ISRO after he retired as director of various ISRO centres. Aravamudan himself had been personally handpicked by Sarabhai five years earlier. Nair was one of three young men hired by Aravamudan at the time -- the other two are no longer with ISRO.

Nair was designated to work under Kalam, who headed VSSC's payload integration section from 1967 to 1972. Former ISRO chairman Dr U R Rao still recalls how hard Nair worked on a project to develop sounding rockets in collaboration with Japanese scientists.

A decade later, Nair was working on the satellite launch vehicles in Thiruvananthapuram. "The failure of the ASLV was a major setback for the Indian space programme," recollects Rao. "Nair contributed in a major way to the development of the first Indian Satellite Launch Vehicle, the SLV-3. So he was made project director of India's first operational Satellite Launch Vehicle, the PSLV." The Polar Satellite Launch Vehicle is the only launcher whose services ISRO sells commercially. It has also been chosen to send India's unmanned lunar craft, Chandrayaan-1.

Nair took over ISRO's Liquid Propulsion Systems Centre at Valiamala in Kerala at a time when India was struggling to operationalise the Geo Synchronous Launch Vehicle. This launcher, which was even more advanced than the PSLV, suffered a severe setback when ISRO's deal with the Russian space agency to transfer cryogenic engine technology to India fell through because of hidden American interference.

All eyes were on LPSC when Nair became its director in 1995; ISRO's research into cryogenic engine technology was taking place there. Besides, the ISRO spy scandal, as it came to be called, was closed to being resolved.

Dr Nambinarayan, who was heading the prestigious cryogenic system project, and another space scientist, Shashi Kumar, were alleged to be conspiring with anti-nationals through two Maldivian women. The scandal rocked the Kerala government, then led by K Karunakaran, and eventually led to its downfall in 1995. After months of investigation, the Central Bureau of Investigation cleared Nambinarayan and Shashi Kumar and absolved the two scientists of any wrongdoing.

Nair was awarded the Padma Bhushan during his tenure at LPSC. Later, when VSSC director Srinivasan died in office, Nair was appointed his successor. He will continue to remain VSSC's director till his appointment as ISRO chairman is formalised. However, ISRO's official web site already lists him as 'Our Chairman' and links to his biodata.

Dr Kasturirangan points out that Nair used to represent India and ISRO at international meetings of the UN-sponsored committee for the peaceful use of outer space. "He now has vast experience in representing ISRO in the international arena. That will prove very useful as ISRO is all set to go global in the coming decade," he says.

Indian Technology/IT News - Guest - 09-23-2003

[url=""]U.S. to Sharply Cut Number of High-Tech Visas[/url]

Quote:The United States is about to cut the number of employment visas it offers to highly qualified foreign workers from 195,000 to 65,000, immigration experts said on Monday

Indian Technology/IT News - Guest - 09-24-2003



Thursday September 18, 10:38 AM


By Arvind Padmanabhan, Indo-Asian News Service

New York, Sep 18 (IANS) India's IT and BPO sectors are predicted to become the world's third largest by 2008 despite growing resentment against outsourcing in America.

Speaking at a luncheon by the India-America Chamber of Commerce in New York, Kumar Mahadeva, chairman and chief executive of Cognizant Technologies, said India will be the principal beneficiary of BPO from the U.S.

"India's IT and BPO sectors will be the third largest in the world by 2008 after the U.S. and Japan, although it is only scratching the surface today with a two percent market share," he said.

The contribution of these two sectors to India's gross domestic product (GDP) will increase from the current level of two percent to seven percent in 2008 and their share in exports will increase from 20 percent to 50 percent, he said.

"The political side of BPO is certainly heating up," he said.

"But if you look at long-term projection, the skilled worker gap in the U.S. will reach 14 million by 2020," he said in his talk on "The Next Wave of Globalisation: Business Process Outsourcing".

Those present included Consul General of India in New York Pramathesh Rath and Deputy Consul Ashok Tomar as special guests.

Mahadeva said the main reason for the backlash against BPO was that economic recovery in the U.S. had not translated into more jobs.

"It is also the 'silly season' right now in Washington, D.C., with the presidential election, then Senate, the House, and many of the governors and state houses. Jobs, therefore, are certainly a major issue," he said.

Yet, one cannot shy away from the fact that the baby boomer generation in the U.S. is retiring and that the next wave of knowledge workers will be much smaller, he said.

To an extent, Mahadeva also blamed some Indian companies for some of the protectionist measures proposed by the U.S. "The L-1 visas are under scrutiny. The abuse by some India-centric companies has spawned some negative press about L-1 visa misuse," he said.

One of the outcomes has been the decision to restrict the number of H1-B visas to the original level of 65,000 with effect from October 1, from 165,000 earlier, he added.

Mahadeva, nevertheless, was hopeful that the some of the positive aspects of BPO would eventually outweigh the protectionist measures that are being proposed now.

"There has been a dramatic productivity growth in the U.S. because of BPO. The U.S. banking and financial services have saved $8 billion in four years from off-shoring," he said.

"According to McKinsey Global Institute, in terms of additional GDP, every $1 that is outsourced off shore produces incremental GDP of $12 to $14 in the U.S.," he added.

In his introductory remarks, Rajiv Khanna, president of the chamber, said the strong relationship that was seen in the manufacturing sector between China and the U.S. is now being witnessed between India and the U.S.

"In the last financial year, India exported services of $8.5 billion to the U.S. This gave the U.S. a cost saving of $10-$11 billion, which was invested by U.S. companies, leading to more jobs, or distributed as dividends and bonuses, increasing consumer spending and investment," he said.

Indian Technology/IT News - Guest - 09-30-2003

They need to accelerate the pace of development by at least 2x. The projects are taking much to long, But this is an important breakthrough since it utilizes Thorium in the fuel cycle.Thorium is abundant in India.

[url=""]India: India makes crucial breakthrough in nuclear agenda[/url]

Indian Technology/IT News - Guest - 09-30-2003

[url=""]Will your job move to India?[/url]

Indian Technology/IT News - Guest - 10-08-2003

Received via email:


No 8. Atal Bihari Vajpayee prime minister, India

Last year's position : Not Placed

Vajpayee's entrance straight in to the top 10 reflects the success of

the whole Indian offshore IT services market in the past year.

Globally, offshoring is forecast to grow 40 per cent this year alone,

with three-quarters of businesses considering it - with most of the

work tipped to go to the Indian sub-continent. India's boom - largely

engineered by Vajpayee - means some analysts are predicting the country could face its own IT skills crisis over the next five years.

Initiatives introduced by Vajpayee include generous tax incentives for

outsourcers investing in call centres and computer technology,

technology parks and plans for a national fibre optics telephony


But his role over the next few years will be crucial, with India facing

stiff competition from South Africa, Eastern Europe and China as a base

for low-cost, low-risk IT services, with the domestic political and

union issues for those Western companies looking to move large numbers of jobs overseas also on the horizon.

Indian Technology/IT News - Guest - 10-10-2003

Andy Grove at his paranoid best.

[url=",0003.htm"]India, China threats to US' dominance in hi-tech: Intel founder[/url]

Press Trust of India

Washington, October 10

Observing that India and China are "key threats" to continued US dominance in important hi-tech sectors, Intel chairman Andrew S Grove has said India could surpass America in software and tech-service jobs by 2010.

India's booming software industry, which is increasingly doing work for US companies, could surpass America in software and tech-service jobs by 2010, Grove, one of the founding fathers of America's hi-tech industry and co-founder of Intel, told a global technology summit in Washington via satellite on Friday.

He warned that America's software and service industries, strong drivers of US economic growth for nearly two decades, show signs of emulating the struggles of the US steel and semiconductor industries.

He said that the nation's software and service businesses are under siege by countries like India and China taking advantage of cheap labour costs and strong incentives for new financial investment. While the US economy as a whole is improving, its hi-tech employment is not, he added.

According to industry figures, he pointed out, more than half a million technology jobs were lost from mid-2001 to mid-2003. Many of these losses were due to a contraction of the tech sector after the dot.Com bubble (in the telecommunications sector) burst in 2000.

Grove said the US tech industry itself is responsible for numerous jobs leaving the country, as firms take advantage of considerably cheaper labour costs in India and elsewhere.

Indian Technology/IT News - Guest - 10-12-2003

[url=""]Don't worry about China, India is still the best: McKinsey[/url]

BANGALORE: If IT bellwether Infosys Technologies brought the feel-good factor back again by spreading the cheer all around, then Intel Chairman Andrew S Grove topped it up by saying India and China are the key threats to the US dominance in the hi-tech sector.

But wait a moment. Even as Infosys has taken a big step to take on the Chinese on their own turf by deciding to open a subsidiary there, India seems to have a head start over China in the emerging IT-enabled services (ITES) segment.

For all the talk of China, the Philippines and Malaysia giving a stiff competition to India in ITES, the figures put out by global consultancy firm McKinsey paint a completely different picture.

The reason: India is low on cost but high on quality with abundant supply of skilled workforce. But more of it later.

Sample this: A 24-year-old boy working for EDS (Electronic Data Systems) in Mumbai, answering mails and calls of customers half a world away, gets paid $1.25 per hour, while his counterpart in the US would take home $10 for putting in the same amount of time doing the same work.

A programmer in the US earns $68,640 a year, while the same job in India pays only $6,500. On an average, tech workers in India earn $4,500 a year compared with about $45,000 a year for workers doing similar jobs in the US. As Grove says: "The engineer sitting 6,000 miles away might well be in the next cubicle."

If this was all about India's prowess in software services and its global delivery model getting accepted worldwide, then here is more good news for the ITES segment. India is way ahead of China with low-cost qualified workers for this segment, according to McKinsey.

If it costs $2.50 per hour to employ a person in a call centre in Shanghai, it costs just $1.50 in Mumbai. And that is not the end of the story.

If the number of qualified workers available in Shanghai for customer call centres is between 6,000 and 7,000 per year, in Mumbai it is between 35,000 and 45,000.

Not to forget that we haven't even got into Bangalore, Chennai, Hyderabad, Kochi, Delhi, Noida and Gurgaon and it is just the tip of the iceberg.

Incidentally, Manila with 9,000-11,000 qualified workers available per year is the lowest with $1.47 per hour, while Kuala Lumpur with 6,000-7,000 available workforce per year pays $2.19 per hour.

It is not just the call centre jobs where India has an edge. Be it in back office functions of finance and accounting or electronic document conversion, India is way ahead than its competitors. From availability of qualified workforce to costs, India leads the way with China a distant fourth.

If back office work for finance and accounting costs $1.35 per hour in Mumbai, it is $2.03 per hour in Shanghai. And as for the qualified workers available per year: 14,000-17,000 in Mumbai compared with 12,000-15,000 in Shanghai.

"When you can get the same job done for a fraction of the cost, it makes sense to export jobs," says a top official of a multinational firm in Bangalore.

Indian Technology/IT News - Guest - 10-12-2003

From Business 2.0 (subscription site)

What to Send Overseas

Customer Service

To most consumers, the term "customer service" has become synonymous with phrases like "phone-tree hell" and "know-nothing idiots." The fear of alienating customers even more makes many companies reluctant to move this function overseas. But truth be told, a big part of the problem is rampant job dissatisfaction: U.S. call centers are plagued by turnover, with most phone reps lasting less than a year. So moving call centers overseas can do more than shave costs -- it can help you dramatically improve customer service merely by reducing employee turnover. ePerformax Contact Centers, which manages outsourced call centers in both Memphis, Tenn., and Manila, reports that its Filipino reps not only stay on the job longer but are better educated -- 100 percent are college grads vs. 70 percent of ePerformax's U.S. employees. Costs are 30 to 50 percent less in the Philippines, a savings that's typical for offshore locations.

Data Entry

This is perhaps the easiest task to outsource -- workers don't even have to speak the language they're typing -- and thus where cost savings can be most dramatic. Typical is a facility in Ghana operated by Affiliated Computer Services. Linked to the States by a satellite Internet connection, 1,400 workers process medical claim forms for Aetna and others for about $10 a day (10 times Ghana's minimum wage). Costs are similar in the Caribbean, Bangladesh, and Central America.

Software Development Offshore programmers made a name for themselves fixing the Y2K problem. Now they do everything from maintaining aging code to sophisticated work like architecting entire applications. Infosys, Tata, and Wipro dominate the Indian market -- where 85 percent of all tech outsourcing goes. Three years ago, Indian programmers worked for less than 20 percent of their American counterparts' salaries ($65,000 a year, on average). Today the best talent commands as much as $50,000. They're worth it too: Carnegie Mellon's Software Engineering Institute now ranks top Indian firms alongside U.S. companies such as Lockheed Martin and SAIC. Meanwhile, more basic work is moving to Bulgaria, Romania, and Russia, where quality is spotty but wages can be 25 percent less than on the subcontinent.

Is Outsourcing Damaging the U.S. Economy?

Shifting computer programming offshore doesn't generate the grim images that shuttered factories provided in the '70s and '80s. Nevertheless, offshore outsourcing still produces plenty of controversy. (Not to mention irony: New Jersey recently pulled the plug on a contractor's plan to have the calls of state welfare recipients answered by offshore phone reps.) Forrester estimates that 3.3 million infotech jobs will move overseas in the next 12 years -- taking $136 billion in wages with them.

Those aren't very big numbers. In fact, at less than 1 percent of our GDP, the loss is barely noticeable, economists say. "It causes a lot of pain to the workers involved," admits University of Chicago economics professor Robert Shimer. "But there are benefits to a lot of other people from the lower costs of goods and services." Just as America did not become a nation of burger flippers, as was famously predicted two decades ago, the movement of tech jobs shouldn't kill the economy now. And when the impending worker shortage hits, we may even be better equipped to handle it.

<table width="100%" cellspacing="0" cellpadding="0" bordercolor="#000066" border="2"> <tr> <td bgcolor="#000066"><font color="#FFFFFF" class="x15"><b>Outsourcing Hot Spots</b></font></td> </tr> <tr> <td> <table width="100%" cellspacing="0" cellpadding="2"> <tr valign="top"> <td width="50%" bgcolor="#FFCC99"><b><font color="#CC3300">Canada</font></b>
<b>Growth areas:</b> Software development, customer service
<b>GDP per capita:</b> $29,400 (81% of U.S.)
<b>Literacy:</b> 97%
<b>Telecom infrastructure:</b> Excellent
<b>Edge:</b> Doing software R&D here lets you profit from the favorable exchange rate and government tax credits. </td> <td width="50%" bgcolor="#FFFF99"><font color="#CC3300"><b>Ireland</b></font>
<b>Growth areas:</b> Software development, customer service
<b>GDP per capita:</b> $28,500
<b>Literacy:</b> 98%
<b>Telecom infrastructure:</b> Excellent
<b>Edge:</b> Michael Dell thinks Ireland's the best way into Europe, and he may be right: It boasts an educated, tech-savvy populace whose work habits are more flexible than those of their neighbors in the European Union. </td> </tr> <tr valign="top"> <td bgcolor="#FFFF99"><font color="#CC3300"><b>China</b></font>
<b>Growth areas:</b> Software development, contract manufacturing
<b>GDP per capita:</b> $4,600
<b>Literacy:</b> 82%
<b>Telecom infrastructure:</b> Better in coastal cities
<b>Edge:</b> Wages are low. Caveat emptor: Weak intellectual-property laws can lead to major contract headaches. </td> <td bgcolor="#FFCC99"><font color="#CC3300"><b>Argentina</b></font>
<b>Growth area:</b> Customer service
<b>GDP per capita:</b> $10,200
<b>Literacy:</b> 96%
<b>Telecom infrastructure:</b> Excellent
<b>Edge:</b> International calls cost 3 cents a minute, and thanks to a ravaged peso, Argentina's educated workers make less than that. </td> </tr> <tr valign="top"> <td bgcolor="#FFCC99"><font color="#CC3300"><b>Ghana</b></font>
<b>Growth area:</b> Data entry
<b>GDP per capita:</b> $1,980
<b>Literacy:</b> 65%
<b>Telecom infrastructure:</b> Poor
<b>Edge:</b> Shoddy landlines mean outsourcers must use satellite links, but low wages and high quality make up for the added telecom expense. </td> <td bgcolor="#FFFF99"><font color="#CC3300"><b>Romania</b></font>
<b>Growth area: </b>Software development
<b>GDP per capita:</b> $6,800
<b>Literacy:</b> 97%
<b>Telecom infrastructure:</b> Poor
<b>Edge:</b> Three dozen universities teach computer science here, producing a surfeit of highly trained programmers. </td> </tr> <tr valign="top"> <td bgcolor="#FFFF99"><font color="#CC3300"><b>India</b></font>
<b>Growth areas:</b> Software development, customer service
<b>GDP per capita:</b> $2,540
<b>Literacy:</b> 52%
<b>Telecom infrastructure:</b> Mediocre
<b>Edge:</b> India's programming talent has lured 85 percent of all software outsourcing. But wages are on the rise. </td> <td bgcolor="#FFCC99"><font color="#CC3300"><b>Philippines</b></font>
<b>Growth areas:</b> Customer service, data entry
<b>GDP per capita:</b> $4,000
<b>Literacy:</b> 95%
<b>Telecom infrastructure:</b> Good
<b>Edge:</b> American-accented English and a 12-hour time difference make this country perfect to handle the overnight phone shift. </td> </tr> </table>



Indian Technology/IT News - Guest - 10-13-2003

Very interesting column in the economic times, where IBM names Wipro as a global competitor (where is IBM and where is Wipro in gross revenue).

[url=""]IBM identifies Wipro as major global competitor[/url]

The crux of the issue seems to be that IBM sees Wipro as a competitor in the consultancy services area which is IBM's forte and strong growth area.

Definitely a good read.

Indian Technology/IT News - Guest - 10-29-2003

Two somewhat different views from the same issue of BusinessWeek



OCTOBER 27, 2003


The Hidden Costs of IT Outsourcing

While moving software development and tech support offshore is all the rage, many companies find the overall savings aren't that great

Keith Franklin, president of Empowered Software Solutions in Burr Ridge, Ill., loves offshore outsourcing. It means more work for his 40-person company. Just last year, ESS, which specializes in developing applications for Microsoft's .Net platform for Web services, earned $500,000 in revenues from fixing buggy software written in India. It took ESS five months to repair a glitch-filled application for a Web portal. Most pages on the site weren't connected, turning updating into a nightmare. Some code was missing.

The shoddy work didn't come cheap, either: The Indian outsourcer went $1 million overbudget. Franklin says he could have done the project for less than $900,000 -- right here in the U.S.

Indeed, offshoring -- sending work overseas -- isn't always all it's made out to be. Particularly with information technology, which can be a lot more complicated than moving traditional manufacturing operations overseas. IT quality is much more difficult to gauge, says Atul Vashistha, chairman and CEO of info-tech offshoring consultancy neoIT in San Ramon, Calif. And since IT is an integral part of every business process, it requires more communication and management.

Offshore IT outsourcing started to soar during the economic downturn. With their companies' sales squeezed and shareholders screaming bloody murder, many CEOs began mandating that some IT work be sent overseas. They were following the lead of big companies, including chipmaker Intel (INTC ) and software giant Microsoft (MSFT ), that already do considerable software development in India and Russia. With the trend gaining momentum, more than 40% of U.S. companies will develop software or test it, offer tech support, or provide storage functions overseas by 2004, according to market consultancy Gartner (see BW, 10/27/03, "All The World's A Call Center").

"DIRTY LITTLE SECRET." On paper, it looks extremely attractive. A Russian programmer charges 80% less than an American. But when you parse it all out, the total cost of offshoring a given IT job is generally comparable to getting the work done domestically, says Tom Weakland, a partner at management consultancy DiamondCluster. It's just that few companies are aware of these real costs. "Most companies can't accurately measure their productivity and costs prior to and after outsourcing," says Weakland. "Most look just at wages."

A few companies have learned the lesson the hard way. A year ago, 100% of neoIT's business came from consulting companies wishing to go offshore. Today, about 25% to 30% of its business relates to fixing problems, says Vashistha. Most companies don't want to advertise the problems they've run into, of course. "It's a dirty little secret," says Michael Mah, managing partner at software consultancy QSM Associates, based in Pittsfield, Mass. "There could be more crashed projects in the next 6 to 12 months."

One weakness of moving support functions overseas is that it leaves no one on-site to help customers. Take publishing-software maker Quark. For the last year it has based its English-speaking tech-support staff -- people you call if your app keeps crashing -- in India. Kamar Aulakh, Quark's president, claims that the move hasn't affected service quality or caused any customers to flee. He says his support staff is able to resolve problems over the phone. But the trend leaves some customers worried.

BACKWARD PRIORITIES. As Empowered Software has discovered, programs developed by offshore outsourcers are also often buggier than software programmed domestically -- usually 35% to 40% more so, estimates Mah. "If a company makes software for flying airplanes, I wouldn't want [it] to be created with the priority of the deadline coming first and quality coming second," he says.

And if a financial application used by, say, a bank distorts crucial information such as trading data, a customer could sue or withdraw its business. Should such problems arise, the U.S. company can't easily turn around and sue its applications-development outsourcer overseas.

Fixing even small bugs can cost up to 10 times more after the software is written than at the design stages, Mah says. And some offshore-outsourcing companies charge extra for fixing bugs after delivery. In a worst-case scenario, a company could end up feeling like it's in that old Dilbert cartoon in which the pointy-haired boss promises $10 for every bug fix -- and a programmer decides to code himself a new minivan.

MIDNIGHT OIL. Costs add up even when offshoring is done right. Many companies tend to send expatriates to set up their operations abroad -- and their wages usually run high. Then there's the price of additional executive travel. And, ideally, offshore employees are also brought into the U.S. for several months for extensive training in language and culture.

More important is the cost and inconvenience of managing offshore crews. When privately held software maker Elance outsourced some of its development to India last October, its domestic engineers had to work past 10 p.m. every day to communicate with the Indian team. Even now, they have to work late a couple of nights a week, says Fabio Rosati, Elance's president and CEO.

Some companies also have to change their internal processes to accommodate offshore partners. Some decide to open branches abroad, where they have more control over how work is done. And others are diversifying their offshore outsourcing. Last November, Electronic Data Systems (EDS ) unveiled its Best Shore Initiative, designed to help clients pick the best offshore location. The locations have to pass tough guidelines for quality of work, infrastructure, and low cost.

One reason for the initiative, says Dan Zadorozny, EDS's vice-president for application-services delivery, is that labor costs in traditional outsourcing powerhouses such as India are escalating. Already, an entry-level programmer costs more there than in Argentina, he says -- which is where he's increasingly sending clients.

DOMESTIC SOURCES. Software companies that facilitate communication between customers and their offshore vendors are also prospering. Elance's software, already used by shipping giant FedEx (FDX ), General Electric (GE ), and cell-phone maker Motorola (MOT ), allows companies to track specifications, compile an audit trail of what was communicated to whom, and measure performance against hundreds of pages of contracts. The company declines to disclose its annual sales, but Rosati says they're doubling every year.

Other companies hope to lure disillusioned outsourcing customers back home to the U.S. In October, RTTS, a privately held test-automation consultant, unveiled a testing service that works just like one offshore -- only it's delivered out of New York. By doing the testing remotely, as Indian outfits do, rather than on-site, RTTS can match the price of Indian companies.

"It's the same model as India, but there are no time-zone and language issues to deal with," explains Bill Hayduk, director of professional services for RTTS, whose customers range from pharmaceutical to insurance companies. "Customers going offshore aren't happy with the quality they're getting. So we think there's a big opportunity for us."

The outsourcing trend is unlikely to reverse any time soon, however. Pressured by lower-cost competitors, U.S. companies like the instant gratification of savings on wages. But as the real costs of IT outsourcing become apparent over time, many companies may come to realize that it's no panacea.

By Olga Kharif in Portland, Ore.

Edited by Thane Peterson



OCTOBER 27, 2003


Commentary: All The World's A Call Center

Outsourcing doesn't just save cash. It can lift quality

Outsourcing jobs is a touchy business. Executives would rather not talk about the job losses at home, preferring to focus on the cost savings. Here's another thing they don't like to talk about: those manning the phones at call centers overseas often provide better customer service than their American counterparts. That's especially true in India, now by far the most popular destination for offshore customer service jobs. An exec at one multinational gloats that everything from customer satisfaction to error rates are vastly better. "But we'll never talk about that for competitive reasons," he adds.

Call it a hidden benefit of globalization. Certainly, companies try to maintain high quality at every call center -- whether it's in the U.S. or abroad. But knowing that such front-line workers can make or break a customer relationship, many say they find it easier to get consistently fast, efficient, and courteous service from employees overseas.

Why is that the case in India? For one thing, such workers are better educated than their U.S. counterparts. According to Elio Evangelista, a senior analyst at independent research firm Cutting Edge Information, virtually all Indian call-center workers have college degrees. By contrast, many of their American counterparts are high school grads. More education can be helpful as consumers increasingly need complex technical or financial information.

More important, call center work is considered a lucrative, successful job in India, not a dead end. That often translates into a more helpful, friendly phone manner. Patrick Hanlin, CEO of LiveBridge Inc., a Portland (Ore.) company that handles customer service for major corporations worldwide, says he gets 80 applications for each position in India and about four in the U.S. Moreover, only a fraction of his Indian employees leave each year; annual turnover at U.S. centers is six times higher. That means Hanlin's training dollars go further because his employees stick around longer to apply their customer service skills.

For now, the outsourcing debate is focused mainly on lower costs and lost jobs. But for many companies, tapping into a large, educated talent pool and a strong service culture can mean a better experience for customers back home. As Hanlin says: "Consumers care about how well their call is handled, not whether it's answered in Little Rock or New Delhi." Clearly, the benefits of globalization can extend well past the bottom line.

By Diane Brady

Indian Technology/IT News - Guest - 11-05-2003

IT outsourcing to India irreversible: BMC Software CEO [url=",0003.htm"],0003.htm[/url]

There would be a political backlash in the US against outsourcing IT work to India during the elections in the country next year but the fundamental economic value of offshore outsourcing to American companies will allow the industry to continue to grow, a top US IT official said on Tuesday.

Delivering the keynote address on 'India as a product destination' at the Product and Embedded Software Summit 2003, organised by Nasscom at the ongoing Bangalore IT.COM, BMC Software president and CEO Bob Beauchamp said there would be a backlash due to political considerations in the US, where an economic rebound had not created jobs.

"But as studies have indicated that for every dollar invested in India, the value derived by the US economy is between $12 -14," he said.

Beauchamp said the backlash could be arrested if there is awareness of the benefits from outsourcing, and eventually help create more jobs in North America.

Terming the shift of business and IT outsourcing to India as fundamental and irreversible, he said technology development in India is no longer a competitive advantage, and "it is a must have" which will help the Indian and global economy see dramatic improvement.

Citing various studies, he said, they indicated improvement of performance, besides cost savings for US firms from outsourcing to India.

He warned of more protectionist measures in 15 US states, which have not signed to the WTO, against Indian firms. ([i]What's this? <img src='<#EMO_DIR#>/unsure.gif' class='bbc_emoticon' alt=':unsure:' /> can someone explain, pls!)

Indian Technology/IT News - Guest - 11-05-2003

[url=""]Bangalore software exports rise by 65 percent[/url]

Quote:BANGALORE, India (AP) - Software exports from India's technology hub Bangalore shot up by 65 percent to 72 billion rupees (US$1.59 billion) during the first half of the fiscal year, local government officials said Wednesday.

``We are surprised with this growth,'' said B.V. Naidu, who heads the Bangalore office of Software Technology Parks of India, a government body that provides office infrastructure for technology firms.

Local government officials expected export growth of only about 35 percent for the April to September period, Naidu said.

A surge in outsourcing of software and back office work, especially by firms in the United States, helped growth, he said.

During the same period last year, software exports were around US$950 million.

The state's information technology minister, D.B. Inamdar, said the mood in the city's software industry was upbeat. ``The attraction is the good human resources we have. Also, the success of the companies already here is attracting more,'' he said.

During the six months ended September, 66 new software and back office service companies started operations in Bangalore, and 44 of them were foreign, Inamdar said.

He said foreign firms were starting to move more sophisticated work to India.

``We have the likes of General Motors and Yahoo which recently started research and development in Bangalore,'' he said.

However, the state government is cautious about the prospects for the second half of the fiscal year ending March 31, sticking to its initial target of 35 percent growth for the year.

Inamdar said full year exports will exceed 160 billion rupees (US$3.52 billion), compared to 123 billion rupees (US$2.71 billion) in 2002-03.

Top U.S. companies including Hewlett-Packard, International Business Machines Corp., Lucent Technologies, Texas Instruments and Dell have software centers in Bangalore.

India's second and third largest software exporters, Infosys Technologies and Wipro respectively, have their head offices here. Earlier this month, both companies reported better-than-expected results for their fiscal second quarter, ended Sept. 30.

Indian companies export software worth US$10 billion annually. This is expected to grow by about 30 percent for the fiscal year ending in March.

Indian Technology/IT News - Guest - 11-06-2003

[quote name='Krishna' date='Nov 5 2003, 02:49 AM']

He warned of more protectionist measures in 15 US states, which have not signed to the WTO, against Indian firms. ([i]What's this?  <img src='<#EMO_DIR#>/unsure.gif' class='bbc_emoticon' alt=':unsure:' />  can someone explain, pls!) [/quote]


don't worry .those 15 will run to WTO and will sign it before they losses all apportunity, <img src='<#EMO_DIR#>/biggrin.gif' class='bbc_emoticon' alt='Big Grin' /> <img src='<#EMO_DIR#>/laugh.gif' class='bbc_emoticon' alt=':lol:' /> <img src='<#EMO_DIR#>/cool.gif' class='bbc_emoticon' alt='B)' />

Indian Technology/IT News - Guest - 11-06-2003

Our focus is on exports, not Indian market: Infosys [url=""][/url]

Software major Infosys Technologies is not looking at the domestic market except for its banking product 'Finacle' as it feels it gets better returns from the export of software services in the international market.

"When you have limited resources, you have to leverage them with where you get the best returns. Today those returns are coming from markets outside India. That is really the reason why we are not focused on the Indian market other than for banking business," Infosys co-founder and director, S Gopalakrishnan said in an interview.

Incidentally, Finacle came out of the Nasdaq-listed firm's India strategy in 1989.

"We realised that in India we will have a product strategy and entered the banking sector. We felt that the banking sector will be the one that will automate first and will try to become globally competitive. Of course, it also had the money to invest," Gopalakrishnan, who is also the chief operating officer of Infosys, said.

Indian revenues account for less than 2 per cent for the export-focused Infosys, and earns nearly 74 per cent from the huge United States market.

Although the Indian market was maturing very fast by leveraging IT, it was not yet to the level of global market, he said.

"It is matured today. But in terms of the returns from the market, there is a difference at this point. And we see that we get better returns from outside India," Gopalakrishnan said.

Indian Technology/IT News - Guest - 11-06-2003

Another Gates in the making! Founder at 14, CEO at 17, what next


Bangalore boy Suhas Gopinath launched Globals Inc at 14. Today, his firm is a 60-member strong with all of them aged 17 to 22 years

BANGALORE, NOVEMBER 5: It was Catch-22 with a heartbreaking twist. Even before the first faint stubble had darkened his chin, Suhas Gopinath bagged a major outsourcing project that many others would have given their right hand for. But only to be told that the law said he was too young to sign on the dotted line.

That’s the story of this 17-year-old Bangalore boy wanting to be another Bill Gates. He had launched his own firm at the ripe old age of 14 years. Today, his firm, Globals Inc, is 60-member strong with representatives in the US, the UK, Canada and India—all of them aged 17 to 22 years. None of the members have had any formal computer education. Incidentally, Globals’ young CEO had originally wanted to be a veterinarian, until he was in Class IX and the cyber bug bit him.

‘‘I had no knowledge of the Internet. But when I was browsing the Internet in a cyber cafe I stumbled on a source code of a web site. I was fascinated and thought long and hard. I soon launched my own website,,’’ says Gopinath, fingering his navy blue blazer and battling a pronounced stammer, at the Bangalore IT.COM 2003 venue. That had happened when he had still not crossed 14 years.

A week later, recognition came when Network Solutions Inc, owned by Nasdaq-listed New York-based Verisign Inc gave him the certificate of a professional web developer. He was invited to Network Solutions headquarters and even asked to maintain their web site. Now hold your breath: ‘‘I declined because I was not interested in serving a US company.’’

Gopinath says it was the attachment to his family and the ambition to start his own organisation that brought him back to India.

Having passed Class XII in computer science, his veterinarian dream has faded off, but he loves spending his free time with Bushy, his pet dog. ‘‘I don’t have girlfriends,’’ the tiny CEO tells you with a straight face. Globals Inc took shape initially with only four members, and Network Solutions helped him to incorporate the company in the US. ‘‘I was told that in India, you need to pay sales tax and also have an infrastructure before you can register a firm. But all our members work from home or from a cyber cafe,’’ he says.

Gopinath’s company is into web-based and software solutions, mobile and e-commerce solutions—besides making web sites for corporates, advertisers and educational institutions. But Gopinath doesn’t get carried away with the pricing part. ‘‘We even have a client in Frankfurt for whom we made a corporate website. In the last two years, we have been able to generate a revenue of Rs 30,000 to Rs 40,000. We charge only Rs 200-Rs 300 for making a website,’’ he says.

Gopinath had never thought of himself and his team as being far too young in their highly competitive domain, until a Singapore-based business process outsourcing (BPO) company, SingT Inc, approached them. ‘‘They wanted to outsource their projects to us. Everything fell into place, until the moment I found that the law wouldn’t allow me to sign the contract because I was not 18 yet.’’

Not that it has been too much of a dampener. He is now waiting to have the necessary infrastructure in place so that he can incorporate his company in India. ‘‘At any cost, ours will be a purely Indian company.’’

Not just that. Globals Inc has approached the University of Michigan for building a message board that can be a forum for students. ‘‘We also approached the Karnataka Government for projects, but they said the Government projects are given out only to big companies. But we too will be a CMM Level 5 company soon,’’ says a confident Gopinath, straightening his blazer.

Gopinath has already put the management structure in place. There is a chief operating officer, chief information officer, chief technology officer and vice-president (Human Resources)—all teenagers. But with only a modest Rs 40,000 revenue to be shared among the members yet, the firm has not yet thought of a chief financial officer. ‘‘Members who use cyber cafes are given some extra money to cover that charges,’’ adds Gopinath.

The boy CEO has now applied to Stanford University and is eagerly waiting for the result. But he has not let go his entrepreneurial spirit. ‘‘If I get into Stanford, I will get business from the US too,’’ he enthuses. His ambition is to found another Microsoft. ‘‘Initially, when my mom used to scold me, I used to give her Bill Gates’s example. He is my role model.’’

Joining Globals Inc is simple, provided you are in the 17-22 year age group. ‘‘The membership is free of cost. Once you fill up the form and enter your skill set, we will assign a project. And you become a part of our family,’’ he says.

For, this 17-year-old believes that academic skill sets are not the end. ‘‘We need more of personal skill sets to achieve goals,’’ he quips sagely.

Indian Technology/IT News - Guest - 11-07-2003

[quote name='Krishna' date='Nov 6 2003, 04:13 AM']

Not just that. Globals Inc has approached the University of Michigan for building a message board that can be a forum for students. ‘‘We also approached the Karnataka Government for projects, but they said the Government projects are given out only to big companies. But we too will be a CMM Level 5 company soon,’’ says a confident Gopinath, straightening his blazer.

Joining Globals Inc is simple, provided you are in the 17-22 year age group. ‘‘The membership is free of cost. Once you fill up the form and enter your skill set, we will assign a project. And you become a part of our family,’’ he says. 

For, this 17-year-old believes that academic skill sets are not the end. ‘‘We need more of personal skill sets to achieve goals,’’ he quips sagely. [/quote]

this was the key which led Bill to success.

openness and will-power <img src='<#EMO_DIR#>/cool.gif' class='bbc_emoticon' alt='B)' />

so i think rytha should now outsource IF to him..... :roll

(just kidding)