I know this subject has come up before. Let's not kid ourselves, while this
is not an MQSeries subject WE ARE ALL IT and it has an effect on us (MAYBE).
I don't want to start a thread on this so I don't want to hear your opinion
because we have heard the pros and cons ALREADY. An associate passed this on
to me.I am just delivering some information.
bobbee
An interesting article and action by the NJ state legislature.
Subject: [it-marketreports] NJ law on outsourcing stirs disquiet among
Indian firms
NJ law on out sourcing stirs disquiet among IANS/SILICONINDIA NEWS
Thursday, December 26, 2002
The New Jersey Senate's decision to pass a new bill that seeks to ban
outsourcing of government contracts overseas, particularly to countries like
India, has been received with caution by Indian IT companies.
NEW DELHI: A section of the high-profile technology industry feels the
promulgation of the law would not have an impact on profitability of
Indian firms as very few companies undertake outsourcing activities for
public enterprises in New Jersey. Others, however, fear it may set a
precedent and spread to other U.S. states in the days ahead, casting a
shadow over technology outsourcing, the trump card for India's
technology sector.
"So far as the passage of the bill by New Jersey Senate is concerned, we
don't see any fallout of this on the performance of the Indian companies,"
said Kiran Karnik, president of the National Association of Software and
Service Companies (Nasscom). We have not come across any Indian
company that is really doing any work out there. So it's really very
inconsequential to us. But we will begin to have some concerns if it spreads
to
other states in the U.S.," Karnik told IANS.
The New Jersey Senate unanimously cleared a new bill, which prevents public
enterprises in the state from outsourcing work, specifically to India,
on December 16. Senator Shirley Turner had proposed the bill earlier this
year. The bill has to be cleared by the state assembly now, after which it
will be sent to the governor for approval. If the governor signs it, the
bill will become law.
Analysts say the bill prohibits public enterprises from shifting their call
centres abroad for "cheap labour" with a view to creating more jobs for
Americans as the unemployment rate in the U.S. soars. Industry players here
say other U.S. state governments may also use tough legislation in
the months ahead to protect jobs, badly affecting India's booming technology
outsourcing business in the long run.
"This may see many state governments in the U.S. and eventually even the
federal government going in for protectionist legislation," said the
marketing manager of a leading New Delhi-based technology solutions
provider. "If that happens, we will have to rewrite our business
xpectations.
This definitely comes as a setback for the country's growing IT industry,"
said the official, who didn't want to be named.
India's vast pool of English-speaking and cheaper manpower,educational
system and training programmes have helped transform the country into
a global outsourcing superpower in the last few years. India's software
exports grew 29 percent to $7.5 billion in the past year to March 31,
2002, of which some 60 percent went to the U.S.
The country's rapidly growing business process outsourcing (BPO) industry
has virtually turned it into an electronic housekeeper to the world,
taking care of a host of routine activities for multinational giants. More
than a quarter of Fortune 500 companies such as General Electric, American
Express, British Airways, HSBC and citibank are shifting their back office
operations to India.
The BPO industry in India depends to a large extent on the U.S. These jobs
are mainly coming to India as it is much cheaper to process activities
such as human resources, finance and accounting, supply chain management and
customer care here.
"Any law disabling customer-service efficiencies is likely to have a
fallout," said Sanjeev Aggarwal, CEO of Daksh, a BPO firm that boasts
U.S. financial services firm Citigroup and online retail giant Amazon.com as
two of its big-name investors. "Besides, businesses are not run
for philanthropic reasons and any law that affects a company's bottom-line
will ultimately hurt the consumer that this law is trying to protect.
"I would say the law is certainly not respecting the principles of free
trade. We are facilitating not only high-quality service delivery but
also ensuring that the end product reaches the same consumer within their
means. It would be a shame to axe the branch that they sit on,"
Aggarwal added.
http://www.siliconindia.com/tech/tech_pgtwo.asp?newsno=18031&newscat=Technol
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