Outsourcing R&D Services to India

Outsourcing engineering services or product development to India need not be a frustrating task with uncertain outcomes. My colleagues at Amritt present a structured approach to investigating and establishing effective outsourcing R&D services to India in a forthcoming webinar.

You will learn:

• Whether your organization is ready to effectively outsource R&D to India; as well as  what kinds of R&D work should you send to India in 2011.
• What are the primary engagement models and relative costs?
• How long does it take to engage with R&D resource suppliers from India?
Using case studies, from Amritt’s extensive experience  your will learn how clients outsource  product development to India-based R&D service providers.

Thursday, March 10, 2011  9:00 AM – 9:45 AM PST

Space is limited and advance registration is required. Register now to learn from the comfort of your office:

https://www1.gotomeeting.com/register/120555473

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February 11, 2011   No Comments

Euro Volatility Compels Move Toward U.S. Markets

Recent volatility in currency exchange rates accompanied with spiraling debt crises in Europe are instigating some  fear and worry that a feeling of paranoia may overtake investors. Although the impact may be felt by some U.S.-based companies with outsource partners on the Indian subcontinent, those that spread costs throughout different exchanges such as Euros, British pounds and U.S. dollars may absorb any adverse activity.

Margins will be greatly affected in companies that do not deal with across-the-board costs based on diversified currencies. Accordingly, comments from executives of outsource companies such as WNS’s CEO, Keshav Murugesh, said he was worried Europe may follow what happened in the U.S. in 2009 where technology purchasing was dramatically delayed. He said people in the U.S. last year stopped making decisions about technology buying and he cautions WNS clients to make these decisions in 2010 to save money.

He told the Dow Jones in a recent interview that delaying technology spending has a far more severe impact on outsource companies like WNS. The company conducts back office operations in the financial and banking industry with approximately 60 percent of its business revenue coming from the UK.

Continued depreciation of the euro and sterling against the U.S. dollar has great impact on both UK- and US-based companies buying outsourced services from India. Obviously, ties to American firms help Indian companies prosper during this time where Europe is in financial upheaval.

Murugesh said WNS is seeking to add greater diversity to its client base through an actively aggressive foray into U.S. and India markets.  WNS is seeking to expand its operations to smaller, rural towns throughout India taking advantage of the absence of any wage arbitrage that will allow them to offset the typically low billing rates afforded by their competitors.

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June 10, 2010   No Comments

Outsourcing and American jobs

Does the offshoring and outsourcing of Information Technology and related skills hurt America? How much does it hurt.  I just finished reading an editorial comment in Information Week magazine from Bob Evans, Senior VP and Director of their Global CIO unit. By Bob’s estimate, drawn from Forrester Research numbers,  perhaps $60 billion of work was offshored by American companies in 2008. That’s a lot of dough and thousands of jobs. But then he points out that just four American companies, Eli Lilly, Nike, Boeing, and John Deere had revenues of $54 billion from outside the United States in the last four quarters.  Bob’s point is that offshoring of outsourced work is a small component of the overall economic activity.

(While I agree with the conclusion, there is a hidden fallacy in the international revenues of those four companies, particularly Nike.  I bet 90% of Nike’s international revenue does not result in any American jobs; it’s Asian workers being hired and the products are being sold in Asia or Europe or elswhere).

It turns out that there is INDEED a more complete analysis of the number of American jobs created by exports to Asia. According to the East West Center, Inn manufacturing along, the number of American jobs created or supported by exports to Asia in the year 2008 was 1,515,026.

This includes over 290,000 jobs in my home state of california alone. And the stats don’t count services jobs such as those created in Hollywood, or such as those created by engineering and construction companies. Merchandise exports to Asia earned America $305 billion. This far exceeds exports to the European Union ($230 billion).  What’s more, American exports to Asia grew 67% from 2001 to 2007 (whereas they grew only 53% to EU and 47% to Nafta countries).  Growth rates are best calculated over five year moving intervals since a major purchase of aircraft or infrasctructure in a given year can distort the year-to-year growth numbers. The East-West Center’s website for this data is appropriately called AsiaMattersforAmerica and is worth a visit.  The East-West Center is an education and research organization established by the U.S. Congress, so you can be sure that it free of bias from “external” sources.

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April 20, 2009   No Comments