Column : Delete ‘offshoring’?

What’s in a word? Ask the IT industry lobby Nasscom and they would hint that changing circumstances require more sensitive words. So the word ‘offshoring’ is now outdated and better deleted from our collective consciousness. What has gone wrong with a word that is the essence of India’s IT-BPO industry? The word implies relocation of work to a foreign country to access cheap labour. However,Indian IT has moved up the value chain over the years. While cost arbitrage remains the economic basis for shifting work to India,the industry no longer wants to be seen as providing ‘cheap’ resources. It would much rather be viewed as a provider of highly skilled resources unavailable elsewhere.

Indian IT-BPO firms are positioning themselves as multinationals—job creators as opposed to job snatchers. Unemployment in the US,Indian IT’s main revenue geography,is still high at 9.7%,double the rate clocked in May 2007. The wave of protectionism that started as the recession took hold continues unabated. Just days ago,Democratic senator Charles Schumer from New York State said he would push a Bill that would impose $0.25 excise tax on every customer service call originating in the US but transferred to an agent abroad. The word ‘offshoring’ no longer vibes well with customers in the current climate; politicians never liked it. It carries emotional baggage. Indian firms,particularly BPOs,are ditching the tried and tested ‘lift and shift’ models in favour of ‘mixed arbitrage’—a blend of onshore (at the customer location),nearshore (at a nearby geography) and offshore. Most companies of repute have increased local hiring in foreign locations.

So what should ‘offshoring’ be replaced with? Technology giant HP uses ‘best shore’ but they have a copyright on the word. It means delivering services from the right location or multiple locations a customer is comfortable with. Other companies now use the term ‘rightshoring’,which conveys a similar message. Nasscom president Som Mittal,whose job on hand is to help the industry tide over this protectionist rhetoric,may prefer replacing offshoring with ‘global sourcing’. ‘Skill shoring’,maybe.

goutam.das@expressindia.com