Global-O&O

The audience:

Companies which are offshoring work to India, especially those based in and around Delhi, Gurgaon, Noida.

Summary
Common wealth games in Delhi is the largest international sporting event hosted in India and along with the thrills of the event of this scale, it will also bring chaos to the residents and workers in Delhi and surrounding areas. A number of large off-shoring firms have their operations in and around Delhi and may be directly affected by the Games. With the increased security, traffic restrictions, additional visitor traffic, residents are preparing for a chaotic time. If you are a company with outsourced operations in Delhi or around, your vendor should have contacted you to communicate a business continuity plan on how to handle any disruption during that time. You will see potential work disruption due to your staff (or vendor staff) delayed in traffic and caught up in the chaos in the city during the games.

This is also the time to avoid any site visits to these locations.

 If you have to be in the city early October it is best to plan and be prepared for the added security measures, the chaos of the games and probably if nothing else sit back and enjoy the games amidst all the chaos.

 Article

If you have been reading any major newspaper or following new sites you would have heard about Commonwealth Games. This international event is being held in Delhi from Oct 3^rd to 14^th at an estimated cost of $6.51 billion  ( the original budgeted cost was around $250 million!) , The most costliest of the 19 common wealth games ever held ( And you thought that your programs were over budget).  While winning the bid for the games back in 2003 and having seven years to prepare for the games, it has come down to the  last few days, under an unrelenting media glare  to reach the finish line. The media over the last number of months has showcased the lack of preparedness, the delays, shoddiness, corruption, and blame game around the game. Earlier this month, a number of countries were debating if they were going to send their teams to the games. With participation expected from approximately 72 countries competing in about 17 events this will be an event which will keep residents of the city of Delhi and neighboring regions chaotic and entertained for a couple of weeks.

Commonwealth Stadium Maps (http://www.mapsofworld.com/commonwealth-games/)

Offshore Firms in and around Delhi

Delhi, Gurgaon, NOIDA all the areas in and around Delhi are also some of the largest hubs for global BPO and KPO services.  Genpact, EXL, WNS, HCL, Evalueserve, Convergys , IBM  to name a few have their operations hub based in and around the city where they deliver work to global clients round the world and round the clock.  

What you need to do to plan for any business disruption due to the games

A number of vendors have already been working on putting together business contingency plans working with their clients to avoid any disruption. As an ‘outsourcee’ it is still your responsibility to ensure that your staff has agreed on the plans and you have the right communication within your organization and with the vendor staff..

1. Have a plan ready to implement for business continuity with your vendor/staff in India.

If all goes well there will be a minimal disruption to the operations of your vendors during early October. This is though a good time to be prepared for any disruption and have a good business continuity plan in place to avoid any surprises. Challenges during this time will primarily be around absenteeism in your vendor staff, excessive delays in availability of staff in vendor locations. A number of vendor firms are planning ahead including booking some accommodations for critical employees near the workplace, to allowing employees to work from home and providing them internet access and encourage employees to take public transportations like the Metro.  A number of companies have also designated the last day of the games as a holiday, so be prepared to work with a lesser staff that day.

The best way to be prepared for this is to ensure that you and your vendor have spoken about this and you have a clear understanding of the business continuity plan which will be put in place in case of any disruptions.  

Your onshore staff may also need to take on additional responsibility in case of any disruption and you should be communicating this to your onsite staff.

2. Avoid travel to Delhi and around early part of October

If you are planning a site visit during early part of October to Delhi, Gurgaon or NOIDA it is best advice to consult with your company’s security policy to ensure there are no travel advisories. Security is going to be very tight around the city, especially around the event stadium locations. Traffic will be chaotic so avoid any unnecessary travel in the city.  This will also be a time where the cost of your stay and travel will be 10-25% higher than what you will pay otherwise due to higher number of people coming to the city.

Planning for business continuity is never easy,  planning for business continuity when your staff is located thousands of miles away and affected by events you may or may not aware of is harder. A number of Indian vendors though have done a good job in communicating prior planned events and are seem ready to handle any disruptions caused by the games. The responsibility for your IT and processes is still yours. So make sure that you and your vendor are ready for the games and are better prepared than the game organizers!

Mohit Sharma is the CEO of Corrystone Global Partners. Corrystone is a specialized globalization  firm providing advisory, training and staffing services to firms in  US and India. We work with  firms in the US  which are exploring low cost options for IT, business operations work and  looking at ways to further optimize cost, manage operational risk in a global delivery environment.

With the market demand ramping up for Indian IT and BPO vendors, finding and keeping right talent is once again becoming an important vendor management discussion for the clients and a high priority HR discussion for the IT/BPO firms.

As a number of clients continue to be cautious on the economy, off shoring work has steadily ramped up. Less stellar than the earlier growth, the off shoring growth is evident in the quarterly earnings of off shoring firms and the ramp up of hiring targets by these firms.

With a post recession up tick in the demand for off shoring services, a number of Indian firms are getting aggressive about how to find and more importantly keep employees. Attrition rates have slowly inched back up, wage hikes are being announced by companies to hold on to employees and campus hiring is seeing a surge as the concept of bench strength again trickles back. Ramping up for new client engagements and transitions are taking longer as finding the right people at the right price is tougher now.

Table 1: Attrition Rates in Off shoring Firms

Post 2008, when the global economy was in a freeze mode, the Indian firms had reduced campus hiring, limited employee perks, pay raises, promotions. For a number of  employees in this industry, which had only seen a dramatic growth, the slowdown was a tough wakeup call. For a number of these employees, they had limited opportunities to move to and stuck around waiting for the right opportunity. These employees although more wiser in their career tracks are now willing to jump ship for the right opportunity and pay hike and have less loyalty to their employers. At the same time the jump to a new opportunity also is a longer process as employees are now doing their due diligence before jumping ship, specially the middle managers.

Where India has a demographic advantage of a large growing young workforce it does face the challenges of an archaic education system which ill prepares people for real life global workforce and adds to the supply side challenges for global firms. Where in companies have taken the ownership of training their employees and make them more marketable, during the last couple of years when the markets were slow, the firms were reluctant to invest in training adding to the supply side vows.

For companies which are working with these vendors in India, these supply side challenges is a cause of concern. These companies are finding that where the teams have spent time together building and training staff with vendors, key employee leaving causing more disruption than if the same employee was local.

There are a few issues which emerge due to the supply side challenges for companies who are outsourcing work or planning to outsource work.

1. Firms which are outsourcing need to be prepared for increased cost of transition, specially those starting out new as it takes longer for firms in India now to find and on boarding the right candidates.
2. Firms have to be careful that they are not getting the less qualified ( Team B or C or D) staff for their assignment as this has serious downstream impact. A number of vendors would try to pass on candidates which may not be qualified for the task.
3. HR management even if the staff is a vendor staff is a critical part of planning for globalization. The firms have to take a higher degree of ownership to help retain key staff.
4. Knowledge retention strategies have to be revisited to ensure that higher attrition results in limited disruption of business as usual.
5. For clients looking for vendor staff, it is important to get and look for the right level of staffing. In a number of instances we have found that if you look for the superstar all the time, it is not a viable option. Define the role clearly on what you are looking for, and find people that fit the role and can grow in that role.
6. Training and replacement planning for staff leaving has to be planned as part of the discussion with the vendors to ensure that the companies are not being charged for higher attrition or staff turnover. Plus firms have to retain more onshore staff to deal with higher attrition offshore (increased cost).

Overall the supply side challenges will continue to exist with emerging economies where the gap between supply side and demand both domestically and globally is very high.  That coupled with the fact that the job creation in the US markets is still lagging and there is a talent base available in the US which is willing to work for less.

For firms which are outsourcing, planning for supply side challenges in India coupled with availability of local talent should be an important part of looking at their outsourcing roadmap on how they operate today and for the future.

Mohit Sharma is the CEO of Corrystone Global Partners. Corrystone is a specialized globalization  firm providing advisory, training and staffing services to firms in  US and India. We work with  firms in the US  which are exploring low cost options for IT, Business Process work and  looking at ways to further optimize cost, manage operational risk and setup presence in India. Contact us at info@corrystone.com  to learn more about how we could make your journey more productive by leveraging our experience.

Date: May 14th, 2009
Source: Rediff

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Wipro has clinched the LIC ( Life Insurance Corporation) India deal to upgrade their front end IT systems. The order is worth around Rs 200 crores ( US $ 40 million). Wipro will web enable LIC front end systems over 5 years. Wipro is the second largest player in domestic Indian markets after IBM which earns $ 2 billion. Wipro gets 22% of their business from India.

Other Wipro domestic deals and customers

HDFC
Dena Bank
Employee State Insurance Corporation
Unitech Wireless