When outsourcing companies start outsourcing themselves, what do you call it? Hmm!
I was intrigued to read a news item about Wipro outsourcing Indian worload to Egypt. The reason given by the Joint CEO is to correct the utilisation capacity across geographies. Zawya.com views it as a sign of globalisation of Indian ITES companies.
Just before the recession, ITES companies were expanding globally - Egypt, South America, Near East - being most favoured locations. Once the growth rate came down (during recession), ITES players have been hard pressed to sustain their costs. Business losses have resulted in wider job losses, repatriation of employees and severe cost containment at home.
I wonder the driver for this move and the future impact it will have on the price-list. It is because there are not sufficient skill-sets available in Bangalore to carry on the work? Or is it because the planned business (for Egypt) did not materialise? Either case, it is bound to have adverse effect on the quality of work delivered to the client and costs.
ITES companies have enjoyed playing the price game. While the volumes were good, no one complained. It took one economic crisis to rock the boat. I wonder if it is time for the buyers of outsourcing services to beware and revisit their risk plans.
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