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The new faces of outsourcing

Offshore operations not all about 24-7 call centers

By Marianne Bray

Indian companies such as Patni say they are investing in quality.



•Outsourcing occurs when firms subcontract parts of their business to firms in other countries.

•India's IT services sector employed around 540,000 people, generating export revenues of about $9 billion in 2004 (Morgan Stanley)

•IT services and IT-enabled services account for 47 percent of India's total services exports (Morgan Stanley)

•IT export revenues are expected to rise to $50 billion by 2008 (NASSCOM)

•By 2010, India's IT services sector is expected to employ 1.2 million people, and generate export revenues of $32 billion (Morgan Stanley)

•India's commercial services exports are growing at 20 percent (Morgan Stanley)

•India is ranked number one in terms of availability of qualified engineers (IMD World Competitiveness Year Book)


Technology (general)

MUMBAI, India (CNN) -- In the boardroom of Patni Computer System's Mumbai headquarters in the western suburb of Andheri, the new faces of outsourcing are sitting -- India's youngest and brightest, talking about their lives over a lunch of sandwiches and soup.

They are all technicians -- software engineers who have come up through Indian universities to a company ranked last year by Business Today magazine as among the Top Ten to work for in India.

These six people -- four women and two men -- are highly motivated, working on cutting-edge products for the world market, and in their own way changing the nature of global business.

While most are still in their early 20s, many of them already are working with engineering counterparts in the United States on pioneering projects, such as developing software that will enhance features on cardiac pacemakers.

"Patni attracts the best talent in the IT industry by simply giving responsibility early on to employees," Business Today, which published the survey, said in its November 2004 issue.

And this is just the start of the journey.

Many companies in India are no longer restricting themselves to conducting the back-office operations for overseas companies; their services are now stretching right up to the boardroom.

In a bid to create global products, India's tech-industry powerhouses also are carrying out more sophisticated tasks, such as conducting clinical trials for blue-chip companies keen to move their research-and-development services to the subcontinent.

In 2004, as many as 400 out of the Fortune 500 companies looked to India's large pool of skilled and English-speaking talent to cut their costs, according to Gartner research.

For many, moving offshore allows cost cutting by as much as 50 percent, India's software body NASSCOM says.

It's easy to see why. A software developer can cost $60 an hour in the United States; in India the cost is only $6 a day.

But cost is only part of the equation -- what India offers is quality and expertise at a cheaper price, and as Patni managers say "the work will go to where the talent is."

Each year India graduates more than 2.5 million college students.

Many young Indians have chosen to stay put and make the most of this new tide of work, rather than follow the path of their educated predecessors, who traveled overseas for schooling and training and then rarely returned to their homeland.

"If I had not been working here, I would have been studying in the U.S. for a higher degree education," says 25-year-old Subhash R. Arya, who has worked at Patni for two and a half years.

"It's a much better place to stay with family and friends."

Blazing the trail

Meghana Kolhatkar is the veteran among the Patni group sitting in the boardroom. She has been at the company for four years, and travels 90 minutes each day from the northern suburbs of Borivali to get to work.

Just outside a home that she shares with her husband and son, she passes a sign of the times: "Enroll and collect your offer on Day One from India's topmost networking company -- CMS Computers."

Every work day, she endures a 16-kilometer drive through potholes and dust, past broken-down houses, all amid a blaring cacophony of horns.

Eventually the Lexus and Mercedes sedans begin to outnumber the auto-rickshaws and black and yellow taxis, and after a few turns, Patni's steel and glass offices rear up on the edge of the city's Software Export Protection Zone.

For the group of young people who work at Patni, outsourcing has not only allowed them to stay at home, it has given them unprecedented powers at a young age. There is a massive demand for young IT workers, as Indian companies struggle to retain quality staff.

Across the industry as a whole, as many as 40 percent of IT workers quit each year for a new job. For call centers, as many as half leave, according to NASSCOM, as demand far outpaces supply.

India's government has estimated that the nation's call centers alone will need one million trained and qualified employees by 2009, with a shortfall of 260,000 expected.

India is counting on a growing working-age population to fill the gap.

But for now, companies like Patni fight a battle every day to keep their 10,893 workers. Last year, 1,539 workers left Patni, an attrition rate of 18 percent.

Unprecedented choice

Importantly, workers are beginning to know their worth.

"I can say no to my boss," says Arya, who has four years of work experience. "This is the advantage of having a choice."

To show how ingrained the corporate ethos has become towards hiring to retain, the company's HR manager corrected me for calling them workers earlier that day.

"Here we call them employees," Kalpana Jaishankar said, recounting how Patni turned to global company McKinsey to help it set up a competency-based performance system in a bid to keep staff.

Not only are these workers becoming a force in the outsourcing world, they are slowly changing the stereotypes of India.

As more men and women work together -- across the industry as a whole, 70 percent are male and 30 percent are female -- there are many more opportunities for Western-style romance.

While 90 percent of marriages are still arranged in India, Patni managers say they have stopped counting the number of weddings between their employees.

And family dynamics have changed too. In India's typically male-dominated society, one woman, 24-year-old Deepti Manghnani, said she has become an "elder son for my parents."

"Tomorrow if they have any problem, I'm there."

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