| The differences in the current outsourcing clime | | | | process outsourcing and knowledge process |
| among different regions in the world have become as | | | | outsourcing. The initiative is expected to boost China's |
| stark as black and white this past month. Different | | | | already robust growth in the industry, where the |
| events around the world have contributed to the | | | | country enjoyed a 21 percent year-on-year increase |
| current climate and while some may feel relief, some | | | | to USD 23.6 billion in 2009. |
| are also feeling the pressure. | | | | Analysts speculate however, that India has no reason |
| India's Woes | | | | to fear China as of yet, considering that statistics for |
| In a move that currently has Indian outsourcing | | | | Chinese companies' show that China's numbers are |
| companies abuzz; the state of Ohio in the US has | | | | but a small fraction compared to those of India. In |
| banned the offshoring of projects by government | | | | terms of headcount, 10% of Tata Consultancy |
| departments. In an executive order by current Ohio | | | | Services' [NSE:TCS] current employees already |
| governor, Ted Strickland on the 6th of August 2010, | | | | outnumbers all of China's outsourcing companies; while |
| the governor banned the outsourcing of services paid | | | | revenues from China's largest outsourcing firm, |
| with state dollars, which said that, "Ohio's policy has | | | | Neusoft, reported revenues that were less than 10% |
| been – and must continue to be – that public | | | | of TCS' revenues. |
| funds should not be spent on services provided | | | | The potential though, is where China shows an |
| offshore." | | | | advantage. |
| Indian personalities, companies, and publications | | | | The Philippines is Unfazed |
| meanwhile, have expressed varying degrees of | | | | After the hostage crisis that happened on the 23rd of |
| dismay over the move. Indian outsourcing trade body, | | | | August, one of the primary concerns that the country |
| NASSCOM, on the 8th of September, labeled the | | | | had was whether the event would jeopardize the |
| move as ‘discriminatory' and a ‘trade barrier', | | | | country's outsourcing business. As it turns out, it hasn't. |
| commenting that the move would be | | | | In a press briefing by Philippine President Benigno |
| counter-productive to the US government's initiative to | | | | Aquino III, the country's growth prospects were not |
| reduce public deficit. Even outsourcing company, | | | | derailed by the incident. "We were not derailed. I'm |
| Infosys (NASDAQ:INFY), has expressed their concern | | | | happy to report that economic and business prospects |
| over the move. Kris Gopalakrishnan, Infosys CEO and | | | | are still bright," he said. |
| Managing Director, has said that the company will be | | | | Cited were the current plans for expansion of |
| negatively impacted by the move. | | | | business process outsourcing company, Convergys |
| This development comes just after a controversial | | | | (NYSE:CVG). The company plans to expand its |
| legislation, the border security law, was passed on the | | | | workforce in the country by 5,000 people. The |
| 12th of August in the US. The legislation increases the | | | | company currently employs 17,000 people in the |
| H-1B and L1 visa fees of which Indian companies | | | | Philippines. |
| partake of a large portion. According to Kaufman Bros. | | | | Other outsourcing companies have also announced |
| analyst Karl Keirstead, the law could add up to $15 | | | | this month that they will be expanding their businesses. |
| million in added costs for companies such as Infosys, | | | | Rainmaker Systems (NASDAQ:RMKR), a business |
| who file about 7,000 to 8,000 visa applications and | | | | process outsourcing telesales services company, |
| renewals per year. | | | | announced an expansion of their workforce on the 1st |
| China Forges Ahead | | | | of September by 412 people, with a targeted increase |
| Amid woes from the Indian outsourcing sector, China is | | | | of 2,012 people in the near future. |
| speculating that India is becoming increasingly wary of | | | | Fellow outsourcing provider, Salmat [ASX:SLM], which |
| the competition from the country. | | | | is an Australian-owned company, also announced |
| According to KPMG partner Egidio Zarella, "the | | | | plans to expand. The company announced on the 7th |
| Chinese outsourcing sector is bound to see the same | | | | of September that they will be increasing by another |
| curve the Indian industry had before — they are in | | | | 200 people in a new site in the city of Taguig. The |
| for incredible growth." | | | | new employees would be serving clients from |
| In an effort to foster growth in the outsourcing industry, | | | | countries in Australia, New Zealand and Japan. |
| China, on the 11th of August, announced that they will | | | | These recent events show just how changeable the |
| not be levying operating taxes on offshore service | | | | state of outsourcing is currently. It will be interesting to |
| outsourcing business in 21 cities until 2013. The policy | | | | see what comes next in the coming months. |
| covers firms specializing in IT outsourcing, business | | | | |