MNCs to exit Indian BPOs
Over 24 Multinational Corporations are considering to sell off of their BPO units in India. The Indian BPO sector is witnessing a reversal in trend for cutting cost to Multinational orporations giving off their Indian offshore units. British Airways was among the beginners of the new trend.
In 2002, British Airways sold off its Indian outsourcing unit. Us conglomerate General Electric (GE) also sold off its Indian outsourcing operations about two years ago for about $500 million. Sudin Apte, Senior analyst and head of Global Technology Research firm Forester’s India said that atleast 24 firms were valuating options to sell off their Indian outsourcing units through a gradual exit process. He said that most firms would opt for soft way, part oursource first and increase the share over the period.
According to Forrester, if the size of company’s own facility is small with up to 100 employees, then it is actually counter productive, with savings in staffing costs getting over shodowed by management overhead. And if size becomes too big, over 3,000 people, then the issues of people, process and costs emerge, which are time consuming.
Apte said that the amount of time India management spenr in those things got to such level that they start deviating from their core business of making phones or managing mortage life cycle. He said the managements of those Multinational corporations start thinking if its worth to continue running their own facilities.
He said most of the sell off by Multinational Corporations are either to stop further losses or to focus on core competency and cut costs at the same time. It also depends on type of work and nature of business, he added. While talking about the reason for the Multinational Corporations looking for an exit route, the Forrester analyst said that outsources are needed for mundate and low risk type of tasks.
