The return of George W. Bush to the White House for another four years has enthused both the stock market and the BPO sector in the country. There is today a discernible explosion of expectation, with IT firms hoping that US companies will now be more forthcoming about outsourcing BPO work — both in terms of quantity and quality — to India’s burgeoning software hubs. Besides this, continuity is always comfortable. The prospect of four more years of Bush pleases, all the more so given John Kerry’s election campaign growls over “American jobs going overseas”. But the fact is that outsourcing to India is too big a phenomenon to be seriously affected by an election outcome — for at least two major reasons. First, outsourcing is a win-win strategy. Management guru Peter Drucker got it right when in a January interview to Fortune magazine he pointed out that the 19th century notion of a great corporation doing all its work in-house is completely out of sync with business operations in the 21st century. He went on to explain why this is the case: when you outsource to a total-quality-control specialist, he is busy 48 weeks a year working for you, while a total-quality-control person employed by the company is busy six weeks a year and is writing memorandums for the rest of the time. American companies — and indeed American voters it seems going by their imperviousness to the outsourcing fear factor — have realised this. In fact the profits from outsourcing are being ploughed right back into the US economy. One estimate has it that for every $1 that US companies save through outsourcing, they invest $1.2 in new ventures, thus helping to create new jobs, although they may be of a different kind. Second, India has the largest pool of knowledge workers proficient in English and is fast emerging as the natural destination for outsourced work. There are, however, asymmetries that require attention. Among the concerns expressed in the IT community is the restrictive visa regime that currently prevails. Given the distinct synergy between US-based techies and those at home, this is certainly a speed-breaker. Hopefully the second Bush administration will be more pro-active in addressing these concerns than the first one was.
