BT relocates call-centre jobs to the UK. Bringing Further Gloom for India

In a complete reversal of the normal outsourcing policy for some years now, BT has decided to relocate 2,000 call centre jobs, currently held in India to the UK.

This is seen as a wholly predictable cost cutting measure that will slash half of BT's India-based customer service operations.

Backlash hits India
India is facing further decline in its business of providing customer support and response centres as an outsourced operation, over the coming months. BT insisted that the move is entirely cost-based and is “not about customer service”.

Shareholder Questions
The decision was revealed during a shareholder question session at BT’s annual meeting. When one BT shareholder asked when the company would close its Indian call centres. Her question was met with an enthusiastic round of applause by other investors. Demonstrating a substantial rise in support for in-country and UK national providers.

Chief Executive Statement
Chief executive Ian Livingston then disclosed the decision. After the meeting a BT spokesperson said: “This is not about customer service, as the service in our operations around the globe is of very similar standards. One shareholder commented that they would have preferred that he had used the term 'a very similar high standard of service'.

Mr Livingston went on to say; “It is about the effective deployment of our resources.” BT currently has 11,000 customer-facing call centre staff in the UK.

What Colour is the Future?
Last year the telecoms giant, BT axed 15,000 jobs across the company, and plans to cut a further 15,000 posts this year, to meet shareholders expectations, after reporting a net loss of £83 million in the year to March 2009.

Indian outsourcing fears being burned

Indian outsourcing firms are turning down business out of fear of their customer companies going bankrupt and leaving them holding a bad debt.

As a result of the current economy and the rush to reduce costs, there is an upturn in companies sending work offshore to places like India. So you would think Indian offshore companies would be happy about the potential new business opportunities and be very aggressive about going after them. Unfortunately, that is not the case and the Indian companies are very aware of the fragility of the world economy. They do not wish to be the one's left holding the cheque.

Only a few Indian offshore companies are chasing these new deals because of this, according to Partha Iyengar, vice president and regional research director at Gartner India. In a Reuters story published March 3, Iyengar went on to say that "Indian firms need to focus on revamping their sales models to help generate cost savings and add value to the client's operations," but not everyone agrees with this reason for not chasing potential new business.

In a follow-up comment to the story, one Indian commentator brought up the concern that clients could go bankrupt by the time payment is expected, a very plausible and valid point. Although offshore outsourcing does provide some cost savings to client businesses, it doesn't guarantee they'll come out of the recession in one piece.

The Indians have proved themselves to be excellent and well respected business people over the centuries. Therefore, it seems like a sensible and justifiably cautious approach by the Indian outsourcing companies that they do put themselves in a vulnerable position that may get them dragged down with someone else's sinking ship.

Outsourcing Risks - 25 Most Dangerous cities

After an eventful year that saw terrorist attacks in Mumbai, kidnapping for profit in Mexico, and the unexpected meltdown of Satyam, one of India's biggest IT services firms, the corporate cries to get things done "better, faster, cheaper" and offshore, may begin to be drowned out by the more moderate mantra of today's outsourcing customer: "safer, more stable and definitely more secure."

Interruptions to business customers have upset the sense of security that made Indian offshore outsourcing an uncomplicated buying decision. Companies are putting on hold the offshore projects that were routine just a year ago, puting more effort into investigating and analysing alternatives that help mitigate unresolved risks.

Promising locations like South Africa, Columbia, Malaysia, Thailand and Mexico have done little in terms of government initiatives or social change to allay client fears about their safety, as an outsourcing destination. Some countries with more established IT export businesses e.g. the Philippines and Brazil, have progressed slower than expected.

India's "tier II" cities, once poised to take business away from the cities like Bangalore, do not have the infrastructure and social improvements necessary to compete. India's track record does not bode well for fast development. This making other locations such as Latin America and central and eastern Europe more appealing to corporate organisations.

A number of emerging offshore locations have made great strides in mitigating risks inherent to their countries, while still keeping their costs and overheads low, e.g. Poland, the Czech Republic, Chile, Egypt, etc.

The risk factors involved in offshore outsourcing e.g. terrorism, potential war, disaster, network breaks, environmental disregards, crime and epidemic disease, make contingency plans a greater necessity. The emerging trend currently, is for IT outsourcing customers to seek out solutions closer to home, nearer their own shores or in the same country, where potential problems can be more readily understood, predicted and better managed.

The 25 Riskiest Outsourcing Cities in the World

Rankings based on mean scores in ten areas of risk as reported by The Brown-Wilson Group's "2009: The Year of Outsourcing Dangerously"

1. Bogota, Columbia
2. Bangkok, Thailand
3. Johannesburg, South Africa
4. Kuala Lumpur, Malaysia
5. Kingston, Jamaica
6. Delhi/Noida/Gurgaon, India
7. Manila/Cebu/Makita, Philippines
8. Rio de Janeiro, Brazil
9. Mumbai, India
10. Jerusalem, Israel
11. Curitiba, Brazil
12. Dalian, China
13. Juarez, Mexico
14. Brasilia, Brazil
15. Chandigarh, India
16. Colombo, Sri Lanka
17. Ho Chi Minh City, Vietnam
18. Quezon City, Philippines
19. Accra, Ghana
20. Pune, India
21. Chennai, India
22. Hanoi, Vietnam
23. Bangalore, India
24. Hyderabad, India
25. Kolkata, India

The Worst Three Cities for;

Corruption & Organized Crime

1. Bogota, Colombia
2. Juarez, Mexico
3. Johannesburg, South Africa

Heightening Trans-national & Geopolitical Issues

1. Delhi/Noida/Gurgaon, India
2. Jerusalem, Israel
3. Colombo, Sri Lanka

Unsecured or Unprotected Networks and Infrastructure

1. Bogota, Colombia
2. Bangkok, Thailand
3. Kingston, Jamaica

Unstable Currency

1. Bangkok, Thailand
2. Bogota, Colombia
3. Johannesburg, South Africa

Personal Crime Rate/Police-to-Citizen Ratio

1. Bangkok, Thailand
2. Johannesburg, South Africa
3. Rio de Janeiro, Brazil

Environmental Waste & Pollution

1. Bangalore, India
2. Chandigarh, India
3. Kuala Lumpur, Malaysia

High Terrorism/Insurrection Threat

1. Mumbai, India
2. Delhi/Noida/Gurgaon, India
3. Jerusalem, Israel

Legal System Immaturity

1. Bangkok, Thailand
2. Bogota, Colombia
3. Kingston, Jamaica

Weather/Climate Threats

1. Kingston, Jamaica
2. Manila/Cebu/ Makati, Philippines
3. Bangkok, Thailand