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Showing posts from May, 2003
Caught between a threat to the L-1 and a decline in the H-1

As has been widely reported (including in the New York Times), John L. Mica, a Republican Congressman from Florida, has introduced a bill to prevent US companies from hiring foreigners with L-1 visas.

What makes the L-1 visa so important to Indian companies? For one, there is no cap on the number of such visas. The NYT article also points out that the L-1 does not require employers to pay workers prevailing wages. The Mica bill, if passed, would ensure that L1 visa holders can work only in their own company premises and not at a client location.

OK. But why do large Indian companies like Infosys and Wipro have to worry? After all, these guys can get most of the work done at their offshore development centers, right?

Well, that is certainly the goal. But, in reality (going by the trend in recent quarters), the percentage of onsite revenues has been going up. Analysts attribute this phenomenon to the new types of services being …
Heralding the arrival of 4G
4G mobile telelcom technologies combine Wi-Fi-style Internet access with the blanket coverage, and fewer base-stations, of a mobile network, says The Economist. And companies like IPWireless, Flarion, Navini, ArrayComm and Broadstorm are offering them to operators as a way to make money out of existing 3G licenses.

"Such 4G wireless-broadband systems can be seen in two ways: as a rival to Wi-Fi that offers wider coverage, or as a wireless alternative to the cable and digital subscriber-line (DSL) technologies that now provide broadband access to homes and offices. Mostly, the wireless operators evaluating 4G see it as the first, and fixed-line telecoms operators as the second," the article adds.

Click Here to read the full The Economist article

Congresswoman probing use of Indian IT workers by US insurance firms

According to a report in The Hartford Courant, Connecticut Republican Congresswoman Nancy Johnson has requested five leading American insurance companies with offices in Connecticut--Aetna Inc., CIGNA Corp, The Hartford Financial Services Group, The Phoenix Cos. Inc and Travelers Property Casualty Corp--to reveal how many Indian citizens they are employing in their IT departments.

The report said Johnson wants to know how many Indians the companies employ on H-1B visas now, whether that number has grown during the past two years and how many American IT workers the companies have laid off. "The congresswoman's interest in this is to see that Connecticut jobs are protected and that the law is followed," Johnson's press secretary said in the report.

The report pointed out that 165 employees of Infosys Technologies worked at various US offices of Aetna (as of last June) and 400 more of the company'…
Bank of America tech worker's suicide linked to offshore outsourcing
Naturally, the "3-m plus-US jobs-to-be-lost" Forrester Research study figures prominently in the reports about the suicide.

Here are some extracts from the article headlined "Job losses sap morale of workers" in Contra Costa Times (May. 19, 2003).

One month ago, Kevin Flanagan took his life in the parking lot of Bank of America's Concord Technology Center, on the afternoon after he was told he had lost his job.

It was "the straw that broke the camel's back," his father said, even though the 41-year-old software programmer suspected it was coming. He knew that his employer, Bank of America Corp., like other giant corporations weathering the economic storm, was cutting high-tech jobs. He knew that Bank of America was sending jobs overseas. He had seen his friends and coworkers leave until only he and one other person remained on the last project Flanagan worked on.....

(Here co…
Now, the UK's Telegraph worries about loss of local jobs

While the topic of the "backlash" is getting quite boring, what makes The Telegraph article reasonably interesting is that a) it is well written, and b) it throws some new numbers from a study of the efficiencies of financial services outsourcing conducted by accounting and consulting firm Deloitte & Touche. (*At last*, the media has found an alternative to the mysterious Forrester Research report--which supposedly says 3-m plus US jobs are set to go "poof" becuase of offshore outsourcing.)

(Some extracts by way of general background--ie, stuff that everyone--at least, in India--knows about:)

When the chairmen of the big UK banks and insurers get together, all they want to talk about is how fast they are relocating operations to India - and although they are all gung ho about it, they are slightly anxious about whether the Government will weigh in to slow the trend....

Centres in India handle the proce…
Why the critics of offshore outsourcing should relax: Conference Board
I *finally* came across an article that places the much bandied-about Forrester Research numbers (saying 3 million+ Americans will jobs due to offshore outsourcing) in proper perspective.

Fortune writer David Kirkpatrick in his column titled "Net makes job exports easy", as expected, quotes the Forrester Research "estimates that 3.3 million US jobs will move offshore by 2015". But, thankfully, he also spoke to Ms.Gail Fosler, chief economist at research firm Conference Board, who says "the critics should relax". Fosler doesn't think that the trend will significantly hurt US employment. Fosler also points out that the US services sector loses about ten million jobs every year even as it creates another 12 million. "So a couple hundred thousand jobs a year going to India is a drop in the bucket," she says. In addition, this new means of holding down costs will combat inflati…
"What did you do during the 2000s?" : Seth Godin

Permission marketing guru Seth Godin is back to liven up entrepreneurs and other risk-takers with a new article in Fast Company magazine.

An extract:

"Here's a question that you should clip out and tape to your bathroom mirror. It might save you some angst 15 years from now. The question is, What did you do back when interest rates were at their lowest in 50 years, crime was close to zero, great employees were looking for good jobs, computers made product development and marketing easier than ever, and there was almost no competition for good news about great ideas?"

Click Here to read the full version of the article.


Is a Wi-Fi bubble building?

BusinessWeek examines whether Wi-Fi technology is headed the way of the tulips and the "dotcoms". The article sees the sector receiving "excess investment based on careless projections of future demand". (Quite a nice definition for a "bubble", right?)

BW's conclusion: "Wi-Fi is really two markets -- one consumer, the other corporate. And at the moment, they seem to be headed for divergent paths -- one difficult, the other more promising."

Click Here to read the full article.

Why Warburg Pincus finds the BPO business attractive

Some interesting extracts from an Knowledge@Wharton interview with Wolfe Strouse managing director at global private equity firm Warburg Pincus which has invested in Indian BPO company WNS

"In July 2002, WNS acquired a company in Britain called Town and Country, which provides claims processing services to the auto sector -- largely to self-insured fleets -- using an advanced technology platform. The company processes claims, but also it provides a preferred network of repair shops. We have moved some of the claims processing as well as the maintenance of the network to WNS operations in India. We have seen tremendous efficiencies from both the technology enablement and also from the highly skilled labor in India. Similarly, there may be processes that are not yet technology-enabled. One can technology-enable them and layer them with cheaper, better resources to get a doubly positive effect.....

Outside the technical support help…
US, Australian states to pay cos. to keep jobs local

eFunds to open center in New Jersey, shift jobs from Mumbai
Financial services-focussed BPO firm eFunds Corp. is to shift call center jobs from its Mumbai office back to the US. In response to criticism from local politicians, the New Jersey state government has asked eFunds to open a new center in the state to provide support services for its unemployment welfare program. The state government will now pay eFunds 20% more for the outsourced services than envisaged in the original contract.

eFunds' new center at Camden, New Jersey is expected to employ about 10 workers earning $10-12 an hour as against the $2-3 earned by its agents in Mumbai, reports Rediff.com. To compensate for the increased cost of operations, the New Jersey government will pay eFunds $73,800 a month over and above the current monthly payment of $340,000.

Under its original contract beginning in February 2002, eFunds was redirecting toll free calls from New Jer…
BT responds to union protests on move to set up 2 contact centers in India

UK telecom giant BT has been facing protests from its unions ever since it announced plans to open contact centers in India. The union had conducted demonstrations in front of the company's UK contact centers and threated to strike work. Click Here to read Business Line's report (dated Martch 21, 2003) on the union protests and comments from union leaders.

In a press release titled BT Retail Chief Criticices Union Stance Over India the company's CEO, Pierre Danon, hit back at the union protests.

Here are some intresting points regarding the Indian centers made in the press release:

 the contact centres in India will be at least of the same standard as those in the UK and they will be managed by BT Retail, using its own systems, processes and technology;

 they will be superb working environments and the people will be paid at the upper quartile within the information technology-enabled services mar…