Outsourcing costs may creep up

The Mumbai terror attacks couldn’t have come at a worse time for the $50-billion IT BPO industry.

Though many industry honchos feel that the IT BPO sector may now see a further slowdown in new business and client visits, others feel that clients will now look at setting up disaster recovery centres as an integral part of strategy which will lead to an additional cost burden.

Most industry leaders are still unanimous that the perception of India as an outsourcing destination will remain unchanged. There will, however, be a short-term impact. Employee security will also be beefed up further. Experts also add that there will be fewer overseas customer visits, at least in the short term, delaying due diligence process, which will impact new business in the short term.

“Outsourcing as a business strategy is inevitable in the long term. But in the short-to-medium term, we will definitely see the cost of outsourcing go up. This is because vendors will have to provide centres in multiple cities in order to have a strong disaster recovery and business continuity strategy. This will make the cost of outsourcing go up,” says Avinash Vashishtha, CEO of Tholons, an outsourcing advisory firm.

The apex body for IT and BPO industry Nasscom, however, said all its offices will remain open. “We have some global events lined up in Hyderabad which are on track. We will not bow down to terror. The industry has put in business continuity plans to ensure 24/7 operations. We are confident that the government is dealing with this issue very strongly. The city of Mumbai is resilient and will rise from this crisis as have all the other major cities,” said Nasscom President Som Mittal, just back from an event held on Wednesday evening in Mumbai’s Sheraton hotel.

Some Mumbai-based BPOs say that they continue to operate though with less staff. Some BPOs like Firstsource diverted its call traffic to its locations in other cities.

http://infotech.indiatimes.com/Outsourcing/Outsourcing_costs_may_creep_up

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Outsourcing costs may creep up