Introduction
Outsourcing entails constricting through erstwhile establishments to carry out business dealings that are deemed “non-core” as well as “non-revenue” producing in the direction of the business dealing. Establishments utilise “outsourcing” facilities on behalf of tasks, for instance “payroll”, invoicing and so on. While these practices may perhaps be achieved economically and reasonably, through erstwhile corporations, outsourcing permits establishments to concentrate on its mainstay proficiencies.
Outsourcing is delegating a procedure, for example artefact creation or development, towards an intermediary business. The assessment to subcontract is frequently carried out due to a concern for decreasing business’s expenses, transmitting or storing up power focussed at the proficiencies of a fastidious company, or to formulate extra proficient utilisation of property, industry, assets, knowledge and capital.
Outsourcing occupies the relocation of the organization in addition to the everyday implementation of a complete trading task to an outside provisional supplier. The patron association and the dealer go in a deal contract that identifies the assigned packages. In the contract the provider obtain the resources of manufacture in the shape of a relocation of individuals, possessions and erstwhile assets from the patron. The patron consents to acquire the facility from the provider for the time of the agreement. Company divisions characteristically subcontract comprise of “information technology”, individual assets, amenities, property organization, and book-keeping. Several corporations in addition subcontract consumer sustenance and “call centre” utilities similar to marketing on TV, Computer Aided Design sketching which is high on demand, consumer provisioning, promotional explorations, industrialisation, planning, internet programming, and technical scripting, “ghost-writing” and manufacturing.
“Outsourcing” and “offshoring” are utilised transposable in open communication regardless of significant methodological disparities. Outsourcing entails dealing through a contractor that could or could not engage a little measure of “offshoring”. On the other hand, when we talk about “offshoring”, it is the relocation of a managerial utility to a new state, despite the consequences of, if the vocation is “outsourced” or resides inside the unchanged business.
Outsourcing denotes huge mainly Information Technology “outsourcing” accords. Outsourcing is an agenda to facilitate diverse divisions of the patron company to be supplied as of changed brokers. This necessitates ascendancy representations that match scheme, noticeably describe dependability and encompasses along the length incorporation.
Premeditated outsourcing is the systematized understanding that materializes as companies depend on transitional promotions to offer dedicated facility that complement active potentials installed beside a company’s assessment succession. This kind of understanding generates importance in companies’ contributed procession ahead of those reimbursement attainments during expenditure wealth. Transitional promotions that offer dedicated facility come out as unlike manufacturing situations strengthening the division of creation. Consequently better information consistency and abridge harmonization, apparent organizational segregation surfacing beside an important succession. Division of transitional promotions transpire as the harmonization of invention athwart an important procession is shorten and at the same time as information turn out to be consistent, formulating it undemanding to relocate manners athwart limits.
Description: Business Processing Outsourcing-BPOs
Business process outsourcing (BPO) include the broadcast of practices beside the connected functional performances and tasks, to an arbitrator accompanied by a minimum definite identical provisioning point and where the patron include a determined hold on the actions of the seller for joint extensive period achievement. BPO is absolutely linked to the hunt for additional well-organized managerial devises that include price decline, output expansion and pioneering potential. For this reason, it is the basis for tactical benefit.
BPO is over and over again separated into two groups: “back office outsourcing”, that comprises of in-house production roles for example costing or procurement, in addition to “front office outsourcing” that comprises of consumer linked provisions for instance advertising or methodological maintenance. The everlasting openings Information Technology offer, motivates transitional BPO movements. BPO which specifically look for business remotely far away an organisation’s individual nation is occasionally described as “offshore outsourcing”. BPO which is specifically looking for business to an organisation’s adjacent state is now and then identified as “nearshore outsourcing”.
Employment of a BPO as contrasting to an “application service provider (ASP)” more often than not also indicates that a definite sum of threat is shifted to the corporation explicitly operating on the progression fundamentals in support of the subcontractor. BPO comprise the “software”, the progression supervision, and the individuals to function the facility, at the same time as a distinctive ASP replica comprise merely the terms of contact to utilities and characteristics supplied or doled out in the course of the utilisation of “software”, typically by means of internet “browser” to the consumer. BPO is a component of the “outsourcing” business. It is reliant on IT infrastructure; therefore it is as well denoted as IT facilitated provisions. Information progression “outsourcing” plus authorized procedure “outsourcing” are several of the divisions of “business process outsourcing”.
Solitarily the generally essential benefits of BPO are the system that it facilitate to boost an organisation’s litheness. Nevertheless, quite a few resources have dissimilar traditions in which they observe managerial litheness. Consequently “business process outsourcing” improves the agile-ness of an association in diverse traditions. For the most part provisions offered by BPO sellers are presented on a charge for provisional sources. This assists a corporation aptly more agile by altering set into changeable expenditure. A changeable expenditure configuration assists a corporation resorting to alteration in essential aptitude and does not indispose a corporation in endowing in possessions and thus formulating the corporation further agile. Outsourcing possibly will offer an organisation with amplified suppleness in its source administration and decrease retort period to chief ecological modifications.
Literature Survey
When it comes to information technology, suddenly India is the talk of the town. Take the Southern Indian City of Chennai; all eyes are turned towards Tidel Park, and IT corridor has become the place to be. Every second youngster wants to be an IT professional, and all the major IT companies have firmly planted themselves in the metropolis. Information technology has come to Chennai with a bang. Even though people claim that IT entered Chennai a decade ago, the real impact became apparent only around five years back, when big companies like Cognizant, Infosys and then likes emerged in the Chennai market – and the city’s route to IT/ITES hub began.
In the past few years Tamil Nadu saw a phenomenal growth in the IT/ITES, BPO and IT hardware manufacturing sectors. The Software exports from Tamil Nadu has touched Rs.14,115 crores, while the depth and range of the IT sector speaks for itself in the following figures:
- Application Software and System Software: 70 per cent,
- IT Enabled Services (ITES) and Business Process Outsourcing (BPO): 13per cent;
- Communication Software, VLSI Design and Web Solutions: 8 per cent,
- IT Consultancy: 6 per cent,
- Product Development: 3 per cent.
Given these figures, it comes as no surprise that a large chunk of the State’s economy is dependent on IT and BPO sector. In fact, according to 2004-05 fiscal figures, the IT sector was churning out 10703 crores, which have been increasing by the year. The state government having taken the initiative, now sits smugly and watches the rewards roll in. In addition, a number of software units have also grown quite rapidly in the State, which can now boast of approximately, 1500 software units that have established their facilities. Foreign investment is also flowing in smoothly, opening job opportunities for a huge number of engineering graduates.
Telecommunication sector has also flourished in Chennai. When Bharti Enterprises, India’s leading telecom conglomerate, announced the Airtel’s launch in Chennai in 2001, it was just the beginning. The following years saw an immense growth in this field in the State and today Tamil Nadu stands among the leading states in terms of telecommunication.
It would be safe to attribute that most of these rapid developments have come due to IT’s powerful presence in the city. With a decent salary at the initial level, young people have found needed spending outlets, which they found in the shape of malls, pubs and coffee outlets. A very rosy picture, indeed. So what makes Chennai such a viable IT hub? Most IT experts claim that Chennai always had what it takes to make it an IT hub. Prior to the IT boom, Chennai was known for its expertise on automotives. Probably the only automotive hub in the South, the metropolis has been tinkling with automotive components ever since 1960s, and today it is a veritable home to international automobile giants such as Ford and Hyundai. The automobile sector has always had a strong presence in Tamil Nadu, which could arguably be one of the reasons why it could open doors to the IT industry with such ease.
The second important factor, which has allowed IT to become successful in Tamil Nadu in general and Chennai in particular, is the academic infrastructure, which churns out a considerable number of engineering graduates every year, most of whom are quickly absorbed in the IT/ITES sector. According to the government figures, Tamil Nadu at this point of around 400 engineering and polytechnic institutes. This kind of indigenous untapped manpower was bound to attract investors, which it did. Also, Chennai has a well-connected airport, low cost of living as compared to other cities in India, and more importantly, less attrition, one problem that companies face in other States.
Another very important factor that turned Chennai into an IT/ITES hub is the State government’s initiative and keen interest in the field. The first State to form an IT policy, both DMK and AIDMK governments have initiated important ventures to pump investments in the IT sector. Though a little slow in the uptake, the State is also working on the infrastructure of the sector, in order to avoid collapse in the progress. Tidel Park with all its state-of-the-art technology is ample testimony of the State’s interest in making Chennai the leading IT metropolis. In fact, this IT boom is now gradually moving to areas like Coimbatore and Madurai as well.
The dissertation will first talk about how IT came to Chennai – the major factors – and how it has affected the city’s social and economic structure. They are mostly the same factors mentioned above, but they are discussed more in depth in the proceeding chapters.
Research Design
The one factor that distinguishes Chennai from Hyderabad and Bangalore is the State IT/ITES policy. Most IT experts agree that had it not been for the focused initiatives and a strong IT policy of the Tamil Nadu government, information technology in the State would not have progressed so rapidly and Tamil Nadu may not have emerged as a leading state in the manufacture of electronic products, telecommunication equipments and computers.
Ever since the late 1990s and into the 21st century, the TN government has been a driving force behind the uplift of IT in Chennai. The State was the first to come out with an IT policy. It helps of course that Chennai can boast of quite a few engineering colleges, but the government has also been sharp enough to lure foreign investments in the IT and BPO sector. Says Sriram, owner of a software house, BTS, “It also helps that the current State government has enough clout on the Central government to manipulate the IT policy, and achieve their target.”
Resultantly, the state saw an influx of major companies like Samsung, Motorola and Dell Computers which established their manufacturing units in Tamil Nadu in the telecommunication sector, while IT companies like Cognizant, Infosys and the likes also started looking seriously at Chennai as a prospective IT hub around five years ago. Today, IT majors such as TATA, Infosys, TCS, Wipro, Satyam, Flextronics and Cognizant regard Chennai as their veritable headquarters.
According to the 2006-07 policy note of the IT department, government of Tamil Nadu, a sum of Rs. 1.25 crores has been provided in the demand for IT promotion. In the same note, Chief Minister, M. Karunanidhi mentions the new Information Technology Policy, which will “comprehensively cover all sectors of the IT industry- Software, IT Enabled Services, Business Process Outsourcing, Product Development, and Knowledge Process Outsourcing”. Similarly, a separate policy for IT Hardware manufacturing and Biotechnology is promised.
In fact in the 2006-07 year budget, the State provided a provision of Rs.3 crores for reimbursement of Stamp Duty paid by the developers in the private IT parks. It also gave a sum of Rs. 1 crore for encouraging the participation of small and medium enterprises in national and international events.
The information technology budget of 2007-08 saw an expansion in the IT sectors with software companies being set up in areas other than Chennai. In fact, February 2006 witnessed IT’s entrance in Coimbatore when the foundation for the Information Technology Park was laid. Such parks in areas like Madurai, Trichy and Salem are also in the pipe line.
The setting up of ELCOT – Electronic Corporation of Tamil Nadu – was also an important link in the attempt to develop the IT sector in the State. Touted as the “promotional agency designated by the State government for promoting IT industries in Tamil Nadu,” the Corporation has been quite active. According to government claims, ELCOT is actively involved in creating a proper infrastructure for the IT sector, besides helping entrepreneurs in developing computer software and hardware activities, promoting joint ventures, and providing technical support for small and medium sectors.
One of the major achievements of ELCOT that the government claims is the setting up of Tidel Park at Thirvanmyur, Chennai. The 20km, six-lane IT corridor – often called a veritable Silicon Valley of India – has now become the hub of all major companies and is expanding by the day. In fact, in the 2007-08 budgets, Chief Minister Karunanidhi announced that bids for establishment of a second Tidel Park in Taramani, Chennai have been called for.
As far as IT Enabled Services is concerned, it was in 2000-2001 when the real break came. Even though a few companies did set up their back-offices in Chennai a decade ago, the treatment was quite step-brotherly, with Mumbai bagging all the high-end business. Eventually, the one factor which played a major role in bringing ITES to India and more importantly, Chennai was the Y2K incident. As in the case of IT, when Delhi had become slightly expensive for many firms, they began looking south and eventually settled in Bangalore, Hyderabad and Chennai, courtesy its indigenous human capital.
“The resources and infrastructure in Bangalore was getting exhausted, which is why many companies began looking to Chennai as their next ITES capital,” says Arshad Hassan, who works for Sutherland, a US-based BPO. “The infrastructure in Chennai may not be great now, but it is definitely improving with more focus on SEZs,” he adds. Also, new players found it safer to land in Chennai rather than Bangalore where the big brands were already a dominant force.
Once again, the Tamil Nadu government played a proactive role in promoting ITES in the State. The ITES policy of 2005 takes an in depth look at the ITES sector with a focus to turn Tamil Nadu into an ITES capital, and inviting foreign investments in the State. Resultantly, Chennai saw keen foreign investment, which is constantly growing.
However, critics insist that there is more than what meets the eye. Many argue that the Tidel Park, with all its state-of-the-art technology, is not equipped to deal with the hundreds of investors that it has attracted. The rapid growth of the IT industry in Chennai also saw an influx of employees from other cities, and according to these people, the city is not ready to deal with this influx at this point. Writes N. Ramakrishnan:
“The Old Mahabalipuram Road, or the IT Corridor as it is commonly referred to, is a classic example of poor infrastructure. This stretch of road is witnessing unprecedented levels of construction activity; so much so that by rough estimates nearly 2.5 crore sq ft of office space for the IT sector alone is under construction. A number of property developers have announced plans to set up large-sized residential projects with the development getting pushed further, beyond Chennai.
“The Government announced plans to improve this road to “international” standards and entrusted this work to a company which was half owned by the State Government. That project is running months behind schedule, with just a 3-km stretch getting improved, almost 18 months after what was originally scheduled, and not much progress beyond that. By the time, this project to improve the road from Taramani to Siruseri, a 23 km stretch, is completed, at the pace of progress; the six-lane road might just not be enough to handle the number of vehicles that will use that road.
“Therefore, this calls for a more radical initiative. Probably an elevated expressway along the whole stretch or a mass transportation system — a mono-rail, perhaps.
Is the Government ready for such thinking or would it focus all its energies on more freebies, is the question that the industry and investors would like to know the answer for.”
Critics also predict that water, already a sore point with Chennai, will become a huge problem, particularly in the IT corridor, while the 24-hour power supply and sewage disposal from the corridor will also put a lot of stress on the city’s power distribution and waste disposal infrastructure. But this will be discussed in detail in the chapter on Tidel Park and IT corridor.
However, the State representatives claim that Chennai is well equipped to deal with the pressures of being an IT/ITES leader in India, which is what, sets it apart it from Hyderabad and Bangalore. Moreover, despite the infrastructure being a prospective problem, it cannot be denied that the IT/ITES sector in Tamil Nadu, particularly in Chennai has progressed in leaps, and the claim that Chennai can be the IT leader in future will not be far wrong.
Data Analysis
“Welcome to Tidel Park – The preferred IT Park”, reads the official website of Tidel Park. Claimed as India’s single largest IT Park, this 46km long corridor – according to government figures – presently houses, or is in the process of housing 30 IT Parks, involved in investment of around INR 60 billions. The total office space, TNRDC (Tamil Nadu Road Development Company Ltd) claims, is about 20 million square feet.
The IT corridor connects Madhya Kailash Temple Junction on Sardar Patel Road, with the East Coast Road (ECR) at Poonjeri near Mahabalipuram. Inaugurated in 2000, this IT corridor opened doors for not just major local IT companies, but foreign investors as well. It was also instrumental in creating a large number of job opportunities, particularly for the fresh graduates from the various and engineering colleges in Tamil Nadu. Although in its infantry stages, the Tamil Nadu government envisages the IT corridor as a city unto itself, with “high speed data / voice communication backbone by multiple service providers and 100 per cent back up for power and communication facilities.” It also claims that the Park will have “Intelligent building management system (IBMS) facility connected to all key utilities, video conferencing facility, world’s third largest TES systems for ACMV, premises and facility management by multinational agency, and facilitation / consultancy services for new JVs in IT infrastructure projects.”
In terms of infrastructure, the corridor can boast of all the state-of the-art amenities, including 100 per cent stand-by captive power plant, high-tech broadband connectivity with unlimited bandwidth for ISDN and video conferencing, automated energy management system and access control and security systems.
Also, in order to accommodate the IT professionals working in the Park, a lot of residential units also started cropping up along the IT corridor. In fact, according to a year 2005 news report, the entire residential project estimated at a whopping INR 550 crores. This has led to an automatic and exorbitant hike in the real estate prices all over Chennai, an issue which will be discussed in detail in the chapter pertaining to impact on real estate.
So far, so good. On the outset, it does seem like Tidel Park is the best thing to have happened to Chennai is decades. It also cannot be denied either that the Park has been inviting a huge amount of capital (as illustrated in Table 1.) for the Tamil Nadu state. Therefore, the impact of Tidel Park on the state economy stands true. But then again, there are always two sides to the picture.
“The TNRDC claims that the road infrastructure in and around Tidel is fantastic,” says an employee with a software house situated on the Old Mahabalipuram road. “But what they conveniently omit is the fact that this work has begun at least three years later than it should have.” Resultantly, while the road in front of Tidel Park looks like it has just been laid, but the rest of the road all the way to TCO is in a dilapidated condition. In fact, with so much of sleek glass and mortar emerging on both the sides, the so far neglected stretch becomes all the more conspicuous – which is the least of the problems.
More problematic is the fact that since the industry standards call for 100 sq feet for every employee, the total area of IT parks in Chennai should provide office space for two lakh people. However, in the hurry to attract investment, the city administration decided to sideline the supporting infrastructure. Resultantly, even if a third of people who will be employed in the corridor decide to purchase a house, the demand for housing will be 60,000 dwelling units per year, currently only 3,000 to 4,000 dwelling units are being made.
Critics argue that as a result, Chennai cannot provide housing for IT employees. The corridor also requires a supply of 50 litres of water per day for every employee; this demand cannot currently be met and will require a rearrangement in the method of distribution and allocation of fresh of water resources of the city. The internal roads leading to these IT Parks have also not come up. The requisite 24-hour power supply and sewage disposal from the corridor will also put a lot of stress on the city’s power distribution and waste disposal infrastructure.
Similarly, other areas in the city have also felt the impact of this congestion directly or indirectly. “This rise in real estate prices has put enormous pressure on the land and road infrastructure,” says Sriram. “The development has been somewhat unplanned, at least in the heart of the city, with multi-storey buildings beginning to dominate the landscape. This has led to practically no parking space in most areas, and extremely unruly traffic.” This may seem trivial to many, but to a common man, these amenities, or rather lack of them, makes a huge difference, adds Sriram.
Research Findings
“In the last few years we have experienced that the IT sector has a major potential to change the future of real estate. At present, there are approximately 1, 75,000 employees in the software, data processing and call centre business. According to estimates, these employees earn INR 35 billion [per annum] in terms of direct salary. This senior has shown indication in real estate investments.”7 In an interview with the Deccan Chronicle, E.V. Perumal Sami Reddy, Chairman, EVP Group, Chennai, drew an apt picture of one of the most conspicuous impact of information technology on the city’s social and economic landscape.
Of all the major influences that Chennai have had to face from IT in terms of economics and lifestyle, the real estate has been hardest hit. In the past couple of years, Chennai saw a phenomenal – almost unbelievable – soar in land prices in both commercial and residential areas.
As mentioned in an earlier chapter, various residential units have come up along the IT corridor in the past couple of years. While on the one hand, it is serving its purpose, the fall out has been a rise in land prices to alarming heights. “The demand for commercial office space shot up when software companies decided to have operations in Chennai. The city then did not have many built-to-suit commercial buildings, which was what software firms wanted,” says the head of CB Richard Ellis, (Chennai operations) Thirumal Govindraj, in an article by Shabana Hussain in Financial Express in 2004.
Tamil Nadu state government has also been quite instrumental in bringing this boom in the realty sector. Focused on promoting Chennai as an ideal business destination, the State invited various foreign investments, which proved to be a viable market for real estate.
Another important reason for this hike has been the high disposable income in the hands of young IT professionals. “Someone who was getting INR 10,000 per month a few years ago, is now getting anything close to INR 40,000,” says Chawla of GO Consultancy. Resultantly, while the IT sector may be able to afford this rise in real-estate prices, it is the common man who has to bear the brunt. In the past one year alone, land prices have gone up by 60 to 80 per cent in many localities.
Frontline magazine, in a special feature on Chennai’s realty boom, validates this argument:
“Until about a decade ago a typical property hunter would have been about 50 years old, planning for a house on the verge of retirement. Invariably such persons would have been residents of Chennai or would have hailed from Tamil Nadu. This situation has changed. Real estate developers say the average age of prospective clients now has dropped to 28-35. Young and adventurous, with disposable incomes that are a manifestation not only of the IT boom but also of newer occupations in the service sector, they come from all over the country. Says one real estate promoter: ‘Chennai’s biggest advantage is that it blends the characteristics of a small town and a big metro.’” It further adds:
“It would be a mistake to think that the boom is entirely driven by the IT phenomenon. The noticeable change in the age profile of the industrial workforce – not just in IT but also in the manufacturing and services sectors – has been made possible by a more flexible approach to labour. Employers across the board appear to prefer a younger workforce, which has implications for the real estate sector.”
“A square foot that was costing INR 3,600 in October 2005 was costing INR 6,700 three months later and today, the cost has spiralled up to INR 10,000 per square feet,” says Sri Ram of BTS referring to an area in Bishop garden. Similarly, a 2400 Sqft house in Perambur, which was priced at INR 55 lacs a few months ago, is now costing INR 75 lacs – on non-negotiable terms. Moreover, according to the owner, the price will keep on increasing.
Initially, Chennai was slow in picking up the uptake. It was only after the state government began to aggressively promote the real-estate market, that buyers began looking to Chennai. In fact, according to Hussain, earlier, since the local realty industry did not have the requisite experience, there was an influx of outsiders like Bangalore-based Durgashree, RMZ, and Mumbai-based Rahejas. Also involved were MNC players like the Singapore-based Ascendas and Lee Kim Tah Holdings. The latter are working jointly with the Tamil Nadu government to construct IT parks on the outskirts of Chennai.
Similarly, the type of houses that people prefer is also changing. With around 40 per cent of the IT professionals coming in from other locations, there has been an increase in demand for serviced apartments and independent villas. Reddy says that ever since the IT/ITES and BPO has put the city on a fast track, people are changing their lifestyles and are looking for more amenities than before. Needless to say, the real-estate agents have been quick to capitalise on this market.
“People blame the IT sector for this hike in real estate prices,” says an IT professional who came down to Chennai from Gujarat three years ago, “But it is not really our fault either. If I have to live in Chennai, I need accommodation. And if the landlord charges me a few thousands more than the average just because I’m an IT professional, I have no choice but to agree to that.” Many IT professionals echo these sentiments, arguing that there is no reason why they shouldn’t maintain a certain standard, since they have the resources to do so.
However, on a positive note, with independent houses getting out of the common man’s reach, Chennai has witnessed a boost in the ‘flat culture’, with more people opting for them. Also, real-estate agents agree that professionals in their late twenties and early thirties have now begun to invest in land, which they see as a sign of prosperity for Chennai. This also had a direct impact on banks, which came out with various home finance loan schemes, giving boost to economy – another optimistic feature of the scenario.
In addition, when it comes to the commercial aspect of real estate, the city’s landscape is definitely going for a makeover, with tall, glass buildings popping up all over the metropolis. In fact, talks of making the country’s first skyscraper in Chennai have begun to make rounds. “It may be as tall as the Petronas Tower in Malaysia, if not more,” says T Chitti Babu, MD Akshya Homes, a leading construction company is South India. “We hope it wills a 75-storey structure, with a routine revolving restaurant to give it panoramic view of the metro and surroundings.”
What is interesting – and definitely a positive development – is that it is not only the heart of the city that is growing, but the suburbs as well. Unlike Hyderabad or Bangalore, Chennai is gradually spreading its wings far and wide, and more and more suburbs are being turned into residential locations with all the basic amenities. However, it remains to be seen how the government plans to deal with the water problem and waste management in these areas.
Proposed Solutions
The abundant human resource in Chennai’s information technology and BPO sector was one of the major stakeholders in turning the city into an IT/ITES hub. With companies like Cognizant, Tata, Wipro and Infosys coming to Chennai and creating more job opportunities, it is no surprise that today more people are tuned to IT more than ever before.
Fortunately, there is no lack of opportunities either. If anything, according to Chawla, there are more openings and less number of IT/ITES professionals who fit the bill. “The market is growing,” he says, “and companies are looking for suitable professionals, unlike earlier, when professionals from any background were absorbed.”
At a point when already around 1,75,000 professionals are involved in the IT/ITES sector, it is indeed a testimony of its rapid growth that there is still a dearth of people. This is also because, more and more companies – both local and foreign are looking to Chennai as their home ground. For example, Cognizant already as more than four offices located in different parts of Chennai.
This phenomenon has automatically led to people migrating from different parts of country, which has played a role in changing its social structure. In the last couple of years, Chennai saw large-scale migration within the IT/ITES sector, so much so that around 40 per cent of the IT professionals have come from outside Chennai.
“Since Tamil Nadu has a decent academic infrastructure in terms of IT, it made sense to bring the business down south, instead of calling the human resource up north,” adds Chawla.
Moreover, most IT experts agree that the work environment in Chennai is far more superior to other countries. “The work ethics in Chennai are more professional than other cities. They communicate well in English, which is very important for BPO culture, people here are sincere to their jobs, and have a more focused outlook,” says Sriram.
Women, in particular, have profited considerably from the IT/ITES job market. The men-women ratio in this sector can easily be 60-40, empowering women much more than before. Women graduates from all over Tamil Nadu are not working in the IT/ITEs and related fields. So much so, that in the 2007-08 budget, the TN government has decided to construct a large Working Women’s Hostel Complex, availing financial assistance under the Working Women’s Hostel Scheme of Government of India.
These job opportunities also opened doors to higher salary packages, says Chawla. “Around five to six years ago, before IT/ITES came to Chennai, there were hardly any jobs for fresh engineering graduates,” he says, “But now, not only are most of them absorbed, but the package begins at around INR 10,000 to 14,000.” This, he adds has the potential of doubling up with a year. Added to this are the various incentives that have made the IT/ITES sector one of the most sought after professions in Chennai.
However, there is always the question of the job market reaching a saturation point. After all, how long can the IT/ITES sector continue absorbing the human resource? Chawla is optimistic that such a situation will not arise for at least 5 years. “Saturation can only come from poor infrastructure,” he says, adding, “So long as the infrastructure is sound, the question should not crop up”. IT/ITES in Chennai, he feels, is systematically spreading.
With the coming of IT/ITES and BPO, the job culture has also witnessed tremendous change. Employees now work longer hours (sometimes even round the clock) and under a lot of stress, which can lead to Burn Out Stress Syndrome (BOSS). In fact, many observe that since people join this field in their early twenties, they tend to burn themselves out around their late thirties. Although, in its infantry stages, IT/ITES and BPOs have managed to settle well and make their presence felt in a grand style. However, the real test has begun now for the city when it will have to avoid the hiccups that led to the collapse in Hyderabad and to an extent in Bangalore.
Where does India go from here? It has been a quantum leap for the once sleepy city, and so the government needs to ensure that it stay awake from now. The impact has been too great and too rapid, and it will take some time for the people to fully come to terms with it. Innovative projects need to be initiated regularly in order to absorb fresh talent. Real estate in particular need to be looked into more seriously. Similarly, infrastructure – a sensitive point – needs to be taken care of as well. With expanding the IT sector to smaller locations, it seems as if the government does have the right idea in mind, or so the experts say. IT maybe the buzz word today, but it all depends on the future policies of the State on whether it remains a buzz word for a long while, or fizzles out into nothingness in the five years as predicted.
Future Research
Even though the aforementioned points of view support the observations that Information technology infrastructure adds to the suppleness of associations, administration better be cautious with the functioning of it. A quantity of them has a propensity to transform their approaches, behaviour and temperament on the manner they converse with erstwhile patrons. Even if BPO has several probable compensations there are little hesitant obstructions that might oppose these compensations. In the midst of efforts that happen in preparation are: A malfunction to convene provisioning stage, indistinct agreement problems, altering requests and unexpected expenditure. whilst BPO does not drills as intended the corporation may well practice the technique in which BPO formulates a corporation very reliant on a retailer and consequently very rigid. Subsequently, these confrontations necessitate to be measured earlier than a corporation choose to employ in “business process outsourcing”.
Jeopardising a contract is the main disadvantage by “Business Process Outsourcing”. Outsourcing of an IT Infrastructure, such as, can originate precautionary possibilities in cooperation from a contact and from a solitude viewpoint. Commencing an information standpoint, an altering approach in workers, irony of operation expenses and the most important peril of mislaid self-government, outsourcing directs to a dissimilar association amid an association and its service provider.
Hazard and pressure of outsourcing ought to as a result be supervised, to attain any profits. In sequence to administer outsourcing in a prearranged manner, taking full advantage of optimistic result, and diminishing hazards and keep away from any pressures, a “Business Continuity Management (BCM)” representation is unified. BCM includes a certain framework, to productively recognize, administer and organize that production procedure that are, or know how to be “outsourced”. An additional structure, further determined on the recognition procedure of probable “outsourceable” Information technology infrastructure, recognized as “AHP”, is elucidating.
Hence, L. Willcocks, M. Lacity and G. Fitzgerald recognize quite a few constricting troubles corporations’ visage; sort from indistinct agreement arrangement, to a deficiency of perceptive of technological Information Technology procedures. (Willcocks, L., Hindle, J., Feeny, D. & Lacity, M, pg 7-15, 2004).
Rolling India Inc has shown the way to rocketing land owners, properties and transportation expenses in “Tier-1” metropolis. BPO business has flourished all these duration for the reason of its aptitude to distribute provisions at a small expenditure. Raised communications expenses, land property expenses, and wages have hoisted BPO expenses extensively and accordingly Indian BPOs within “Tier-1” metropolis are searching “Tier-2” and “Tier-3” metropolis for functioning.
A small number of industrialists who had a visualization of carrying the pastoral India into the majority of information financial system have establish an opening here – situational rustic BPOs. The revolution of rustic India underwent with the materialization of these pastoral BPOs. The most important obstacle that these BPOs encountered is superior work force influence. Consequently these rustic BPOs have lingered objective short stop professions similar to “data entry”.
“It is much easier to see the short term benefits of protectionism than to see the long term costs to consumers and business competitiveness.” These comments were given by Patricia Hewitt who is the British Trade and Industry Secretary.
It appears opposing to articulate that the relocation of work from one state to a new one in point of fact generates work in the previous. On the other hand, that can in due course be the scenario. As “NASSCOM” accounts for, the “BFSI” subdivisions have set aside “$6 billion” within the recent times and owing to these reserves they have supplemented 125,000 fresh employment chances in the following duration as a consequence putting off dismissals.
Almost “170” Indian Information technology organisations have headquarters in the United States of America and they engaged almost “60,000” individuals in the north western continent one year after the millennium. The organizations and the certain individuals compensated with practically “$810 million” in excise duty by 2001. Workers of Indian Information Technology organisations purchased merchandise and provisions valued at “$1.2 billion” in America and remunerated virtually “$300 million” as collective defence by 2001.
The “NASSCOM” project persisted in enlightening the supplementary remunerations. “BFSI offshoring” has brought about excellence and efficiency expansion by “15-20%” and consumer contentment by approximately “85%”.
The information provided a prominent illustration of the achievement of the “automobile” trade in America as a result of “outsourcing”. In the present day, this trade is the principal trade on the globe and two of the principal “automobile” corporations happen to be American. The business has the equal amount of qualified individuals that were during 1994 at the same time as they were during 1974 that amounts to be somewhere around “900,000”. During the given time transactions and provisions in this region raised to “20%” as of 2 million towards 2.4 million. “Outsourcing” provided this business a cutthroat peripheral and unbolted several prospects in an expression of empowering in fresh apparatus and remanufacturing procedures.
The American “steel” business, on the other hand, opposed “outsourcing” and underwent some losses to a great extent regardless of numerous taxes and allowances. In the course of the rising uproar in opposition to “outsourcing” every individual has to inspect effects further impartially. Conditionally, expenditure profit and assessment accumulation possibly will not be evident for the reason that the preliminary savings are included in getting to train and in communications. Moreover variance in opposition to relocation of trade gives the impression to fortify the disagreement. Nevertheless, as the “NASSCOM” account demonstrates, the extensive profits are extremely influential. Not merely does “outsourcing” BPO to India permit worldwide corporations to gain several of the finest aptitude and proficiency at reasonable charges, other than it in addition to permit the corporation to in reality bank quite a few positions that it could have had to discharge or else.
At the same time as the universal market develops a fresh division of English culture connected to ESL has turned out to be extremely manoeuvred. This ground is frequently known as “Accent Neutralization” and sometimes as “Accent Reduction”. The most important principle of “accent neutralization” is to assist capable English spokesmen converse with an extra “North American” or “British” inflection. The foremost basis of this drift in the direction of “accent neutralization” is the claim formed through “outsourcing”.
Outsourcing is in general classified as the relocation of constituents or huge sections of an association’s in-house communications, employees, procedures or functions to an outside reserve. The inclination is in the direction of outsourcing to nations where this job can be finished at lesser rate to the corporation. The foremost accepted nations for outsourcing include India owing to its affluence of extremely cultured English spokesmen. “Accent neutralization” is an added bonus that appears whilst these employees converse with Americans who have problems in deciphering their inflections. Certainly, the English conversed is outstanding. The difficulty that occurs is that a lot of consumers have complications comprehending pronunciations except their own individual ones; therefore inflection neutralization turns out to be significant for client contentment.
Paradoxically speaking, notwithstanding the remarkable expansion prospective of the segment, “attrition” tempo and the work force catastrophe are decreasing the expansion of the segment. The team of recruitment and HR of several BPO trade are encountering a range of confrontations akin to the attrition feature and its repercussions, skill deficiency, maintaining the workers and so forth. The basis of employment utilised by the BPO corporations are ads, worker recommendations, outsourcing and just walk in interviews. The Indian BPO business that recognized itself as the low-priced target for business process outsourcing in presently the last few years is unable to locate its situation as the economical target as of the increasing populace expenses. In conjunction to the NASSCOM study, it is stated that, “The IT-ITeS industries are struggling with the critical issue of acquiring and sustaining manpower in the industry. The BPO trade – one of the most rapidly growing sectors in the Indian industry- is grappling with the issues of skill shortages, high attrition rates, and performance management along the confidentiality and security concerns. All these issues are having a negative impact on the BPO industry.”
The Human resource department requires rethinking the departmental guidelines for the business devoid of encompassing on the charges reasonable of the Indian BPO business, to maintain the workers in the association and to preserve India’s standing as the lesser charge objective for business process outsourcing universally.
From the time when the notion of “offshore outsourcing” was primarily invented, it has observed permanent development, equally in expressions of quantity and worth. Definite nations have administered to attain guidance standing in the middle of “offshore outsourcing” positions since they have a number of likely rewards that permit them to supply together with excellence and rate efficiency to customers. Dependable information point towards that on a standard, “offshore outsourcing” to certain nation’s effect in investments of approximately 45%.
Owing to their regal olden times, a quantity of budding nations has likely recommendations for example an enormous aptitude group of competent experts, adept in equally “written and spoken” English. Still better is this fact of employing the necessary aptitude and talent individuals is a great deal extra reasonable in these states. By means of fundamental wages preliminary at approximately $5000, they seize immense prospective as expenditure useful outsourcing targets.
Even though a great amount of teenagers are fascinated by the BPO business for the reason that the lofty wages presented by the BPOs to students at university level and high school level; in addition the urbane work surroundings, the amenities similar to free of charge food and “transportation” and so on.; breakdown to manage through the pressure of the unusual work timings, the dull vocation, the reimbursement offers and the prospects for advanced studies is unsuccessful to prolong their stay with the company.
In support of the Indian BPO business to prolong its expansion and situation, the HR department should re-devise their approaches to make sure the predicament of the attrition velocity exclusive of mislaying their expenditure usefulness. BPOs should resolve to revolutionize their attitude and the exercise of- “No matter I have a high attrition rate, I can cope up if my recruitment process is good”, to forming a harmony among the vocation time, expansion prospects, and the needs of the work to manage the attrition in the business.
References
An Introduction to Outsourcing. 2008. Web.
Attrition in BPO, Call Center Retention Problem, Outsourcing crisis. 2008. Web.
Cover Story: The Indian BPO sector dealing with the Challenges. 2008. Web.
Developers have a field day in Chennai. 2008. Web.
Information Technology Enabled Services (ITES) Policy of Tamil Nadu, 2005. Web.
Willcocks, L., Hindle, J., Feeny, D. & Lacity, M., IT and Business Process Outsourcing: The Knowledge Potential, Information Systems Management, and Vol. 21, Prentice Hall Publications, 2004.