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Outsourcing, pandemic and two headlines
Before evolution
forces the outsourcing model to perform a menial flit, it is time for an
intervention. The first headline: alarming, yes, but directly related to the current
pandemic. The second headline, if read right, is an opportunity from the crisis
to evolve to the next chapter in the outsourcing industry. Future would necessitate
that only some of the total workforce would work from office and additionally increase
throughput.
The manufacturing sector
reaped the advantage of global competitiveness and services sector gained the
arbitrage benefits with Outsourcing. This is all set to change with the first news
headline. The evolution is accelerated by the pandemic and the model needs a
re-think to address not just the “what next” but also the employment
scenario in the outsourcing countries.
With inflation, the
wage gap between India and US has shrunk to two-three times from a 7x
difference. Over the years, the Indian industry (both the third-party service
providers and the GICs) has invested in new skills and making it an USP rather
than a plain vanilla labour arbitrage. Those jobs in the latter category could theoretically
go back to the source to address unemployment unrest in the short term. Compared
to no jobs, even a low paying job would have a positive impact on the US
economy. Though the world is not flat yet, COVID-19 has shown evolution needs
to be faster for business to thrive and balance their responsibility of local employment
and profits.
With the announcement
of the lockdown, India lead the work from home charge with speed and the ability
to work from anywhere. It is not just outsourcing, businesses could further
have an impact because of migration to cloud will accelerate and the increased use
of data analytics will open up new opportunities. The ability to work from
anywhere/anytime will have a big impact on the open office concept. So here
lies the opportunity for the Indian companies to regain the advantage in the
outsourcing industry.
Four key things that can be done immediately to regain
control :
- Be digital first
- Discard the word “Arbitrage” from your internal scorecards
- Invest in roles in countries where outsourcing originated to build credibility
- Create advanced capabilities to resolve the customers’ problems. Knowing the problem before your customers do.
#2020outsourcing #2020outsourc!ng #arbitrage
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