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The Future of Outsourcing in India
aaditeshwar writes "Economist has an article on the current and projected state of outsourcing IT and other business processes to India. The biggest problem seems to be that the talent pool of skilled workers will not able to keep up. Currently there are about 700,000 people working in IT and outsourcing, which is likely to grow up to 2.3 million by 2010, but only 1.05 million new graduates will qualify from local colleges in the next 5 years leading to a shortfall of 500,000 workers! All this despite the fact that almost 2.5 million students graduate in India each year." From the article: "In IT the growth in Indian exports is expected to come both from the software market, and from 'traditional IT outsourcing'--such as the remote management of whole systems, a market now dominated by the big global IT consultancies. This is expected to rise from 8% of Indian sales now to about 30% in 2010, while software-development's share will fall from 55% to 39%. In business-process-offshoring, the big industries will remain banking and insurance. But rapid expansion is also expected in other areas, like legal services."
Eastern Europe has a lot of IT/programmer types.
Since some of them aren't employed, they're part of the burgeoning spam/trojan/virus/worm market that has been growing over there. Organized crime too.
Once the Companies have run out of Indian workers to shift jobs to, they'll move to Eastern Europe sooner or later.
And by Eastern Europe I mean former Soviet Block countries & their neighbors.
[Fuck Beta]
o0t!
In my opinion (14 years of consulting), the India craze did cause a significant dip in rates for US people but even couple years ago we already were scratching the bottom of the barrel. I think the shortage of programmers is a global thing and caused by primitive immature tools and processes and outsourcing is not a magic bullet. My typical client cannot coordinate people across the room let alone across the ocean.
that they start outsourcing journalism to india
As far as I know (from cousins, friends, and general chat from India), there is still a strong demand for the outsourced jobs. Almost tens of resumes per open position, so the prediction of "short fall" looks to be based on shaky ground. There are so many factors involved: there is a large pool of current workers, not all positions require an "IT" degree, and that many jobs may not be created (may move to other countries, or be simply automated).
The unemployment rate in India is still staggeringly high, and the couple of million jobs that *might* be created will be quickly gobbled up.
I suspect that the industry agenda is to continue to have a huge surplus of applicants (or even increase the applicants to positions ratio), so that they can put a downward pressure on the salaries. I'd call it Walmart-ization of the IT (and non-IT) outsourced industry.
S
complains about the lack of programmer graduates from the US.
Does anyone wonder why few Americans want to take up programming any more as a career? There's no jobs for them - the corporations crying about a lack of programmers refuse to look to the US to hire any.
And when BPO hits the banking sector, you can kiss the security of your identity goodbye.
--- Grow a pair, liberals... stop letting the Republicans bully you!
I go through at least 40 or 50 resumes in the US (Metro NYC area) to find one person worth hiring. And these are resumes that have been supposedly pre-screened by headhunters. Resume counts mean nothing if those tens of resumes represent poorly skilled people.
I was an IT worker in India. I am Indian. Indian IT companies recrit all sorts of engineer i.e civil, mechanical, electrical, chemical etc apart from comp sci. Since most engineering students have atleast a common denominator of traits like analysis, rigourous coursework, maths etc. the IT companies know that they can train them in sofwtware with relative ease. Of course the CS grads get the more better technlogy to start with (says database. java etc) while the non - CS ones may have more maintenance, mainframe, testing kind of job to begin with. Most IT companies take grads and subject them to 1-3 months intensive introductory software training courses just like a mini college course. Check for example the infosys global education centre Also large Indian companies are in turn opening offices in China , Hungary etc to outsource the outsourcing.
I'm the network engineer for a company considering setting up an engineering / design shop in India. I just got pricing for a DS3 Internet circuit there. HOLY SPANDEX, BATMAN!
/constantly/, so you'd better plan on two of everthing for redundancy.
A straight E1 circuit (2Mbps) to the Internet is about $4000/month, and about $3000 to install. (All prices in US dollars) Not cheap, but not bad.
A 2xE1 (4Mbps) jumps to over $10,000 per month.
Once you hit DS-3 which is scalable in the sense that once you have the circuit installed ($17,000 one-time fee), you can go from 0-3 Mbps to start all the way up to 45Mbps, your rates go from $16,000/month for the 3Mbps up to over $80,000 PER MONTH for the 45Mbps.
Depending on what you're doing there, the straight E1 isn't that bad, but you really can't pump that much data through it. The ds3 prices are through the roof. Plus, I've been told that the infrastructure there is so bad that shit fails
Now if you're truly outsourcing all of this and therefore feel that you don't eed to worry about the sunk costs, fine, but when you pick the cheapest-of-the cheap bid, that most likely means that they have a crappy DSL out to the 'net that goes down at least once a week for 24 hours at a stretch. "sorry, couldn't {manage your network | take your callcenter calls | upload those CAD files you REALLY REALLY needed by 8AM the next morning} because our local loop was down because some dude running a backhoe trying to upgrade our highway system just yanked our a thousand strands of fiber."
Oh yeah, there's also the problem that India gov't managed-monolopy telcomm says that you can't terminate out-of-country VoIP calls into the Indian PSTN. So now you need either two phones on every desk, or softphones, or ??. Again, two infrastructures for them to manage. (If, of course, they feel that their wageslaves^H^H^H^H^H employees need to be able to call locally while at work.)
My guess is that as these hidden 'costs' start to surface, and as the cost of labor increases in India, people will start to move on to the next cheap area. Lather, rinse, repeat, wait a few years, and everything balances out (or so the economists in the group would say??)
Anyway what do you folks say? ------- Apologies for typos and bad formatting - NO TIME.