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Part - III

Later, with the entry of entrepreneurial visionaries like Narayanmurthy, whose Infosys put India in the world map as a competent software development hub, the service sector was in full throttle. The Offshore Delivery Center (ODC) model pioneered by TCS, presented the MNCs with a cost effective solution to establish their base in India. Lower cost of goods helps both consumers and businesses. A vibrant Indian economy buys US goods and services. US companies, who shift their base to India will in fact, generate more profits, to later invest in growth and create new jobs. As a result of free trade, both the parties, exporting and importing all alike, benefit from this win-win situation. Soon, the foreign companies were thronging India to set up ODCs in various strategic locations across the country. India was subsequently destined to emerge as the Outsourcing destination of the world. Further, McKinsey argues at a well-known point, that for every dollar of work that is outsourced to countries like India from the US, just 33 cents accrue to the country and around 58 cents stay with the US company in terms of cost savings. Hence, with so many positive facets to Outsourcing, does it remain the most coveted proposition for the Indian software companies? Should they remain satisfied to being perennially touted as " The Service Bandwagon"? Let us find out in the following sections.

Shifting Gear

The outsourcing euphoria was short-lived. Buoyed by the success of Indian IT companies, the US MNCs like Accenture, IBM, EDS have ventured into the arena with a bigger agenda in hand - IT Consulting. With prior exposure in this field, these companies are truly global in terms of their operations and culture. Also, they are recognized for their optimal and innovative consultancy in the corporate universe. Indian IT companies, on the other hand, are more in the news for their low-end jobs in the service sector. Traditional white-collar jobs and the intellectual bandwidth are the exclusive property of these consulting firms, wherein they take the high-end decisions. Thereafter, the ideas and innovations are delegated to the service sector companies for physical implementation. Hence, a caste-system is bred within the corridors of the software industry in the form of a white-collar layer atop a blue-collar layer, the latter i.e., blue-collar representing the so-called potential software engineers infesting the country's engineering institutes. The white-collar jobs are the most respected ones representing the architects and consultants of any major system. Indians in the garb of blue-collars have long been regarded as being very good implementers, but when it comes to designing architecture, the white-collar people from the US and Europe, are given preference. A McKinsey paper cites that by moving the service industry to countries with low labour costs like India, US companies can focus on creating higher-value or white-collar jobs. These jobs are created within these consulting firms whose innovations get incorporated at the low-end by the Indian IT companies.

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* Contributed by: -
Kamal Misra,
PGP - I,
XIM, Bhubaneswar.