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Outsourcing the un-outsourcable

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Now the western countries and especially the US is looking to outsource many of the unlikely industries – even those industries which were thought to be untouchables or the un-outsourcables!

As Thomas Friedman said in his book, there are fungible jobs and non-fungible jobs. Non-fungible jobs are the jobs that cannot be outsourced and fungible jobs are those that can be easily outsourced.

Guess what Mr.Friedman, the non-fungible’s are quickly becoming fungible’s and the search for non-fungible’s has started.

Legal Outsourcing India

These are the 3 industries in question and contention :

  1. Legal process outsourcing.
  2. Animation and special effects
  3. eLearning

The reason I picked these industries is these are the dearest industries and are what they call content creators. Legal process is a little different and requires lot of analysis but that is a rising star in India’s outsourcing saga.

For all the 3 industries mentioned above the savings the target company would get is 30-40%. That’s a steal for anybody to not look at this lucrative option. Even if it means displacing some jobs at home, inviting the wrath of some policy makers and attracting some additional taxes.

Rio Tinto the third largest mining company in the world has outsourced most of its legal work to CPA Global’s India arm in Noida. Indian team will work as an extended team of Rio Tinto’s legal experts. India has more than 20 well-known LPO’s which are growing fast and signing lucrative deals. Mindcrest topped the legal in the world in the recent release by Blackbook of outsourcing.

eLearning is other area where we are seeing some announcements and elearning outsourcing is set to become a $600 mn industry by 2012. NIIT and Genpact are leading this space with few others. The noteworthy thing which is being outsourced is the content.

Tata Elxi’s animation and special effects unit has participated in the special effects of Spider Man-3. There are many other such incidents and the well known animation companies in India can be counted on fingers. Hollywood is seriously looking for some serious Indian talent. If you are saving 40% on the cost can you blame them?

Though domestic animation industry is looking for inspiration and is having a amar chitra katha hangover it is growing and will soon come out of it. Roadside Romeo is one such adventure and Amitabh Bacchan starrer Aladin is rumored to use some exclusive special effects done by Mumbai based EyeQube.

Now, that these are outsourced you might argue that they are not un-outsourcable to start with. That is an easy debate and you will win. But, if we have looked at it 10 years ago there would be no debate. India couldn’t do it. And now the statement is – why can’t we do it in India?

Except the presidency of the United States and the captaincy of Pakistan’s cricket team – is there anything that cannot be outsourced?

PS : Both outsourcable and un-outsourcable are not proper English words.

  1. Sriraman says

    Be a local driver in the US, atleast that seems “not-to-get-outsourced” in the shorter term ! But you’ll never know, one day we could have auto pilots and drive controls accessibly remotely and some early 20’s kids might drive that from India via a computer !!! :-) Looks science fiction-ish now but am sure will happen in our life time. Technology rocks !

  2. Madhav Shivpuri says

    I see a world where there is no world called “outsourcing”. I get my website developed using developers on elance.com- the developers can be in Romania, Bulgaria or South America. Or for that matter, US of A ! So, have I outsourced my globally? Yes.

    Teaching can be outsourced. In fact, this is a big industry. Teachers in India can work full or part-time teaching English, Maths, Science or anything to people anywhere in the world using webcam, mike and speakers.

    Can we outsource design and engineering? Yes. Can you outsource healthcare? Yes. Anything, as long as other factors like quality, legality, insurance etc., can be taken care of.

    My point is, anything that can be done in a different time and place, and by somebody apart from you, can be outsourced, without limiting to work related to IT.

    (What cannot be outsourced? eating, breathing, sleeping, having fun … :-))

  3. Philip says

    Will Obama’s rhetoric of moving jobs to Buffalo and not to Bangalore have any effect on this form of offshoring?

    1. Sriram Vadlamani says

      Yeah, that’s precisely my question. How long will the rhetoric hold and to how many industries? I will try answering or questioning that question in my next few posts?

  4. Anthony Denozo says

    Actually, the percentage of US products/services that are currently being outsourced is more like 75. And, I agree that India is the major hub of the outsourcing. With our US economy, it’s very tempting and more likely feasible for companies to go outside the country, especially to India. Many of the major communications companies have been outsourcing to India for years. How many times have we called Sprint or Verizon or Cox Communications to have our call answered by a customer service agent in India?
    I think with the addition of a new President and the many stimulus packages, hopefully, we can keep our business here in the US. Here’s a place where you can get some help with keeping business here:
    http://www.sufaq.com

  5. Girish says

    I agree with you Sriram..almost 60% of the US products/services are outsourced and soon the rest is going to be.These days in the US ,parents prefer their kids to graduate in courses which can not be outsourced.A strict no-no to IT.The intellect and hardworking nature of Indians will make India a major hub for outsourcing.

    1. Sriram Vadlamani says

      What exactly are those courses? And how long will it take to outsource them? I am sounding a little rhetoric but, this is a never-ending chain and innovation is the key. But what to innovate and how long?

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