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=India & Outsourcing = Group ** # **1 ** - Nicollette** Cardwell, **Danielle** Gaut, **Jeffrey** Groveman, **Julia** Gurgel, **Courtney** Mazurek, **Kellen** Mcavoy, **Joshua** Noble, **Nicole** Tawney, **Megan** Vaughn

=__ **Introduction** __ = By** : Megan** Vaughn **__&__** **Julia** Gurgel

Outsourcing can be traced back to the “competitive advantage theory” discussed by Adam Smith in his book, “The Wealth of Nations” published in 1776. Though the term outsourcing has changed considerably from the beginning of its time, there is still no agreed upon definition of this term. According to Webster, to outsource is to “procure (as some goods or services needed by a business or organization) under contract with an outside supplier.” Essentially when businesses outsource jobs, “they hand over portions of their jobs to another company, making it responsible for the design and implementation of certain business process under the requirements and specifications of the outsourcing company” (Flatworld Solutions). Outsourcing has not only directly impacted the people in India, but it has had lasting effects on businesses internationally and within the United States.

=__History of Outsourcing in India __ = By** : Megan** Vaughn

Outsourcing in India had been around since the 1980’s but it wasn’t until 1999 that the Indian government passed the “New Telecom Policy.” According to Flatworld Solutions this policy brought in further changes with the introduction of IP telephony and ended the state monopoly on international calling facilities.” Since then, outsourcing within India has grown rapidly. One of the first products to be outsourced in India in the early 1990’s was medical transcription, but shortly after came outsourcing jobs for customer support and data processing. According to authors of this article, some of the first major American players in Indian outsourcing were American Express, GE Capital, and British Airways. The Internet and Telecom book in the 1990’s was a huge step in the right direction for outsourcing in India. Now, in the 21st century, outsourcing jobs to India is extremely common. According to an ABC news report, there are more English speaking Indian’s than there are Americans and most of them are wired. We now see thousands of Indian’s working in call centers, dealing with American needs. Outsourcing has led to India’s most prestigious company: Infosys, which has around 1.4 million applications for jobs a year. According to InfoWorld’s, Paul F. Roberts, “by 2010 [technology imports from India] will be close to $60 billion, including services and products.” This is exactly what we are seeing today and it will continue to grow. According to an Indian male in Tom Friedman’s documentary, India is going to become a super power and they will rule!

media type="youtube" key="FwwgXCOEYks" height="399" width="490" =__ The Effects of Outsourcing on India __ =  By** : Megan** Vaughn

 For some people, the effects of outsourcing can be viewed as a win-win situation, but this is definitely not the case for all countries. Within Indian culture, outsourcing has both positive and negatives effects on its citizens. An amazing portrayal of this can be seen within a Discovery Channel documentary featuring Tom Friedman, three times Pulitzer Prize winner and foreign affairs columnist, titled “The Other Side of Outsourcing.” According to Friedman, the economic boom from outsourcing in India is affecting young people the most. For most young people living in India, outsourcing is viewed in a positive light. Working at call centers has become the new “hot” job for Indian’s in their 20’s. These outsourcing jobs are providing millions of Indian’s with jobs and money they would never have had the opportunity to make in the past, thank you globalization. Training and competition for these jobs is remarkable. There are currently 555 million people living in India under the age of 25, competing for these outsourcing positions. Working in these call centers allows Indian’s to become more familiar with the American way of speaking, which they are taught to mimic, and provides them with a sense of comfort and stability. Working in a call center pays around $100 a month ($200 is equal to about $1,000 in the U.S.). This amount is considered a lot in Indian culture. According to a young woman Friedman interviewed, young people are now able to call up their friends and go out and spend money, due to the money being made from outsourcing jobs. The new Indian culture has become more materialistic and brand conscious after becoming involved in outsourcing positions and attempting to transform their country into a little America. Outsourcing jobs for the Indian youth are definitely effecting them in positive ways. Enabling both males and females to build careers, money, as well as economic independence. The youth of India believe that their future will see many changes, “India will be a really, really happening country!” According to their parent’s generation, this is not the case. We see the older generation of India citizens rejecting outsourcing and globalization. They believe that it is detracting from the family value that holds Indian culture so tightly together. They believe that there is now less and less respect for the elderly and highly respected Indian gurujuis. The main concern of outsourcing in the new era among the older generation of Indian citizens is that call centers and other outsourcing jobs are causes changes to happen so abruptly. Family rituals and Indian tradition in general is disappearing. Humans have been reduced to consumers and the world has become a market, says an older Indian male interviewed in Friedman's documentary.

 Though globalization and outsourcing may bring money and jobs to many citizens of India, we still see negative effects on many cities outside of Bangalore. For example, if you travel less than an hour out of the city, you will find yourself in the slums, where more than 10% of the Indian blackboard.sdsu.edu resides. They are without adequate food sources, have no running water or electricity. The economic success seen within technology companies around India has not reached many of its citizens. This is resulting in dysfunctional education and healthcare systems. In these cities women are making $1-$2 dollars a day. These harsh conditions show some of the negative effects of globalization and outsourcing on the Indian population. Outsourcing will always have its positive and negative connotations, within all countries. But for the new generation of Indian culture, India will soon become a little America and they are looking forward to this day!

**Inside an Indian Call Center:** <span style="font-family: Verdana,Geneva,sans-serif;">media type="youtube" key="9yVbcWX2lV8" height="390" width="640"

=<span style="display: block; font-family: Verdana,Geneva,sans-serif; text-align: left;">__ **Major Businesses that Outsource in India** __ = <span style="font-family: Verdana,Geneva,sans-serif;">By **:** **Danielle** Gaut

<span style="font-family: Verdana,Geneva,sans-serif;">**Microsoft-** <span style="font-family: Verdana,Geneva,sans-serif;"> Microsoft is one of the world’s most dominant computer technology companies. It creates, manufactures, and licenses a wide variety of software products for computers. This company has outsourced to India since 1990 when it opened its first research and development center (CPA Global, 2008). Over the years, Microsoft has worked tightly with the Indian government, the IT industry, and even schools to help expand outsourcing in India. The work that this company outsources to India aids in their global portfolio. According to CPA Global, Microsoft employs over 4,000 people across six business units.

<span style="font-family: Verdana,Geneva,sans-serif;"> **Hewlett Packard-** <span style="font-family: Verdana,Geneva,sans-serif;"> Hewlett Packard is an American worldwide information technology company. This company specializes in developing and making data storage and network hardware as well as designing software. HP is conceivably most known for its line of personal computer printers. In early 2004, HP set up call centers in India to provide support to U.S. customers who use HP consumer products (Frauenheim, 2004). The reason behind this company expansion was to cater to this increasing demand of low-cost services to its clients. In December 2010, HP announced that they would be expanding their outsourcing efforts in India. According to Hewlett Packard, $1 billion will be set aside for this project in an attempt to compete with its rivals, specifically IBM and Dell, who are already increasing their employees and presence in India.

<span style="font-family: Verdana,Geneva,sans-serif;"> **Dell Inc.-** <span style="font-family: Verdana,Geneva,sans-serif;"> Dell Inc. is an American IT business that develops, sells, and supports computers and related products. This company has become highly recognized for outsourcing customer service to India. By 2005, Dell employed over 8,000 people in customer service and software development. Within a year, they hired an additional 2,000 more employees to work in the call centers (Echienscher, 2005). Outsourcing in India has helped expand the company and its marketing opportunities. It has allowed them to adjust their costs as well enabling improvements and developments within the company.

<span style="font-family: Verdana,Geneva,sans-serif;"> **IBM-** <span style="font-family: Verdana,Geneva,sans-serif;">IBM is an American international consulting and technology firm. It manufactures and sells computer hardware and software. This is one of the most recognized countries to outsource professional jobs, especially in India. IBM employs almost 400,000 employees in over 200 countries (Walker, 2006). According to IBM Overview, in 2010, IBM had roughly 75,000 outsourcing jobs in India. This is up from 9,000 only seven years ago. Through outsourcing. It has greatly improved the company’s financial strength and operations. According to IBM representative, Manjeet Kripalani says they outsource in India because “they’re so good there, they delight our customers. They get value, not just cost.”

=<span style="font-family: Verdana,Geneva,sans-serif;">__ International Effects __ = <span style="font-family: Verdana,Geneva,sans-serif;"> By** : Julia** Gurgel

<span style="font-family: Verdana,Geneva,sans-serif;"> When developed countries, such as the Untied States and United Kingdom tend to discuss outsourcing the general consensus is that it has a massive negative impact on their economy, resulting in job losses and low paying jobs. The views of the people from these countries on outsourcing makes them see the people from India as an enemy of their economy, threatening their current jobs, which they are at risk of losing at any moment of time. This fear can cause a situation where employees have started fearing job losses giving rise to lower motivation and thereby a decline in services (bizbrim.com). If a worker does not feel like an integral part of a company the motivation to do one’s best is greatly minimized or completely lost.

<span style="font-family: Verdana,Geneva,sans-serif; line-height: 16pt; text-indent: 0.5in;"> The positive international effect that is usually not discussed is how g lobal outsourcing helps in creating newer international markets, promotes global citizenship and communication between countries, helps recognize global talent and lastly helps in the development of economics of all the countries taking part in it (bizbrim.com). As of now, people are more worried about looking at jobs that are being lost rather than realizing that new jobs are being created.

=<span style="font-family: Verdana,Geneva,sans-serif;">__ Globalization __ = <span style="font-family: Verdana,Geneva,sans-serif;"> By** : Julia** Gurgel

<span style="color: #3a3a3a; font-family: Verdana,Geneva,sans-serif; line-height: 16pt; text-indent: 0.5in;">The growth of outsourcing is aiding globalization and resulting in the rise of multinational communication, which then in turn generates situations where cut throat competition tends to take over (bizbrim.com). A popular belief is that countries, such as the U.S. and the U.K. should stop looking at the negative side of outsourcing. They should begin to realize how newer and better jobs are being created and ultimately taking place of dull, monotonous jobs, which are improving their economies at the same time, ultimately allowing them to become more prosperous. <span style="font-family: Verdana,Geneva,sans-serif; margin-left: 9pt; text-indent: -9pt;"> =<span style="font-family: Verdana,Geneva,sans-serif;">__ **Predictions for Outsourcing Futures** __ = <span style="font-family: Verdana,Geneva,sans-serif;">By** : Courtney** Mazurek

<span style="color: #3a3a3a; font-family: Verdana,Geneva,sans-serif; line-height: 16pt; text-indent: 0.5in;">With the recent international boom in technology and globalization, we have also witnessed the increase in major US companies utilizing outsourcing overseas, especially in India. As far as this trend is concerned, it seems to only be on the rise, with no signs of stopping anytime soon. Many companies prefer the idea of outsourcing because it’s a matter of maximizing profit margins while also keeping up with their competitors. Industry analysts estimate that hiring programmers outside the U.S. (in locales such as India) saves about 30% in salary costs. In fact, it is predicted that by 2015 472,632 computer and mathematical jobs in the U.S. will move offshore (McLaughlin, and Deuel 114-18). Outsourcing has changed the landscape for US software professionals and reshaped how companies plan to choose their employees. In order to understand and better adapt to this new aspect of globalization, companies will need to cleverly manage their careers and understand the new environment. As businesses are becoming more acquainted with outsourcing, they are also learning about its challenges. Outsourcing is not going to completely deplete or ruin US jobs (as some people may fear)-- it’s not that simple. There are limitations to outsourcing US jobs to India. For instance, software outsourcing works best for routine maintenance or upgrade work, and it creates the biggest savings on large projects; therefore, outsourcing is impractical for many small projects. Likewise, companies involved in product design and strategy jobs will not be able to successfully utilize outsourcing because of cultural issues and differences. As to be expected, not everybody supports the idea of outsourcing US jobs, and the political impact is hard to predict. There have been efforts by lawmakers and lobbyists to try and hinder this new form of globalization. Activists and interest groups have created websites and blogs urging people to use US labor only. They strive to promote utilizing technology workers, products, and services in the U.S before looking overseas.

<span style="color: #3a3a3a; font-family: Verdana,Geneva,sans-serif; line-height: 16pt; text-indent: 0.5in;"> Despite these limitations to outsourcing, this new form of globalization provides benefits for companies as well as for the US as a nation, and therefore has a bright future ahead. Outsourcing could increase the variety of software titles available. This market’s growth has made India one of the few bright spots for U.S. technology sales (McLaughlin, and Deuel 114-18). Many important public figures in the United States endorse the idea of globalization and recognize the economic and global benefit it can provide. In 2002, Microsoft CEO Bill Gates visited Bangalore to pledge $400 million in investments supporting IT education and a “Partnering with India” program designed to increase developer skills (McLaughlin, and Deuel 114-18). Another well-known public figure who acknowledges the inevitable growth and importance of outsourcing is economist and author, Thomas Friedman. Friedman created a documentary about outsourcing in India that was a Discovery Channel Special. In this documentary, Freidman proposes that the current status of outsourcing is only on the rise. Because of outsourcing, there is a fundamental shift of how people do business and the global market is going to change in a way that benefits everybody. Outsourcing will continue to rise because the outsourcing to India is relied upon by some of the biggest companies in the world. The growth of outsourcing and interdependence between countries is something we are going to witness in the future.

<span style="color: #3a3a3a; font-family: Verdana,Geneva,sans-serif; line-height: 16pt; text-indent: 0.5in;">media type="youtube" key="8quDb3FIUuo" height="349" width="425"

=<span style="font-family: Verdana,Geneva,sans-serif;">__ Conclusion __ = <span style="font-family: Verdana,Geneva,sans-serif;">By** : Courtney** Mazurek <span style="color: #ff0000; font-family: Verdana,Geneva,sans-serif;">**__&__** **<span style="font-family: Verdana,Geneva,sans-serif;">Danielle **<span style="font-family: Verdana,Geneva,sans-serif;">Gaut

<span style="font-family: Verdana,Geneva,sans-serif;">It has become clear that in recent years, India remains one of the most popular locations for outsourcing. Outsourcing to India provides a valuable source of cheap labor for companies all around the world. Not only has it benefited international companies throughout the world, it has also provided millions of jobs to the people living in India. Major western businesses have adopting the concept of outsourcing customer services to India. Such companies include Microsoft, Hewlett Packard, Dell Inc., and IBM. Outsourcing to India has created international effects, both positive and negative. Countries like the United States and United Kingdom believe that outsourcing has created dents in their economy and has left many people jobless. Others view outsourcing as a way to create newer international markets while promoting global citizenship and communication between countries. The future of outsourcing looks bright. Many companies are now looking to outsourcing as a way to maximize profits while using cheap labor. Although there are mixed emotions over this new form of globalization, it is very apparent that outsourcing will continue to grow and become a major factor in global businesses. = =

References :

 * 1) <span style="font-family: 'Times New Roman',Times,serif; font-size: 80%; line-height: 15px;">CPA Global. Microsoft: " Outsourcing as a Business Model ." November 2008. Retrieved April, 20, 2011.
 * 2) <span style="font-family: 'Times New Roman',Times,serif; font-size: 80%;">Frauenheim, Ed. __"HP sets up call center in India__ ." February 11, 2004. Retrieved April 20, 2011.
 * 3) <span style="font-family: 'Times New Roman',Times,serif; font-size: 80%;"> Eichenseher, John. __"Outsourcing to India__ ﻿." June 2005. Retrieved April 19, 2011.
 * 4) <span style="font-family: 'Times New Roman',Times,serif; font-size: 80%;"> IBM:Overview: " __IT Outsourcing and Hosting__ ." January 21, 2011. Retrieved April 20, 2011.
 * 5) <span style="font-family: 'Times New Roman',Times,serif; font-size: 80%;">Walker, Randy<span style="color: #0000ff; font-family: 'Times New Roman',Times,serif; font-size: 80%;">.  “IBM's Insider in Outsourcing <span style="font-family: 'Times New Roman',Times,serif; font-size: 80%;">." April, 28, 2006. Retrieved April 21, 2011
 * 6) <span style="font-family: 'Times New Roman',Times,serif; font-size: 80%;">BizBrim.com. "Negative Effects of Outsourcing." 2008. Retrieved April 13, 2011.
 * 7) <span style="font-family: 'Times New Roman',Times,serif; font-size: 80%;"><span class="wiki_link_ext">Bizindia.net. "Pros and cons of outsourcing ." February 11, 2009. Retrieved April 20, 2011.