'Outsourcing will get out from our dictionary'

NEW DELHI, INDIA: Nasscom president Som Mittal believes the ground-breaking concepts of outsourcing and off shoring that catapulted Indian IT industry to the center stage in world economy will get out from our dictionary, as the new world order will not entail the concepts of offshore or outsource.

“The word outsourcing and off shoring will get out from our dictionary because you have to answer who you are outsourcing to and who you are off shoring to,” says Mittal.

“Indian IT companies operate out of 27 countries and in 75 cities have their own centers…. So if that is the case, then it is actually part of delivery chain and not outsourcing”, Mittal added.

Mittal was incidentally speaking at the launch of book ‘Outsourcing to India: Cross- Border Legal Issues’. The book written by Aparna Vishwanathan is reference guide to legal practitioners, when drafting an outsourcing contract involving services rendered in India.

The book provides coverage of contract law, taxation, employment law, data protection and intellectual property rights applicable to outsourcing contracts.

Elaborating on this argument, Mittal said the way demographics are changing across the world, in the next few years the new world order will not entail the concepts of offshore or outsource. 

“In developed world we have an ageing population thus lesser people to service. Younger people in these countries have choices and they don’t want to be in technology space for it is demanding and entails lot of work.”

“Next five to ten years, we are going to see dramatic changes that eliminate many services in the world.  It is not about cost arbitrage, but very few people to service the world. The next five to ten years we are going to see dramatic changes that will the way world works and that will not necessarily mean offshore or outsource,” said Mittal.

Mittal added that these demographic changes across the world present an interesting opportunity for India to cash on.

“From an Indian perspective, population, considered a problem one time, is now an opportunity. Human capital need to be built on and we need to continue to work with the government to get people skilled so they are some of use to changed the world,” said Mittal.

Legal Issues Surrounding Outsourcing

Speaking on the legal issues surrounding outsourcing, Mittal pointed that for Indian IT industry to deal with legal issues with multiple countries gets very difficult at times.

“Each one of the ninety countries we deal has different rules, laws and legal provisions on outsourcing and then you have a single country here which is trying to service them. There is always a gap and need for Indian law to be enacted to deal with needs of every country” 

Speaking on the occasion, Prashanto Kumar Roy, Group Editor, Cyber Media Publications, while explaining the complex legal issues surrounding outsourcing in India, hoped the book would be an answer to the confusing issues surrounding outsourcing to India.

Roy, in apparent reference to the recent issue surrounding Google networking site, Orkut, which had hosted apparently seditious material, called for clear-cut demarcation to define legal issues regarding technology and outsourcing and off shoring.

“When somebody does a search on Google in India and finds seditious material, which actually is hosted on servers in US but is posted from within India, Google is threatened with legal notices,” said Roy.

“Google thinks law might be on their side as US law is applicable to servers, but Google want to continue to do business here and they need to know different aspects of law which are not so cut or dry in terms of which laws are applicable to servers in India,” he added.

Roy expected the book to answer some of those confusions as to tackle issues around outsourcing and off shoring.

Aparna Vishwanathan, in her remarks said outsourcing to India will assume much greater political hues in future and pointed the legal issues involving outsourcing whether it is data protection, identification theft, sale of data bases, protection of intellectual property rights will assume much greater importance.

“A lot of work has to be done by people in the legal community in order to work towards international quality standards which are suitable for industry and also follows our constitutional parameter and basic values which we in the Indian judicial system,” she said.

Historic Opportunity for India

In her remarks on current economic crisis, Aparna termed the crisis as a historic opportunity for Indian IT industry to move ahead in the value chain.

“In hindsight people will look at year 2008 as another major catalyst just as Y2K. Once the dust settles there will be this rush to outsource further,” Aparna said.

“This will be an historic opportunity for Indian IT industry to move from commoditized services either in application development and maintenance or in the BPO space or go up to higher part of the higher value added services.

According to her, this crisis may be a catalyst for a historical change where the Indian IT vendors will go up to much higher level of rendering services and taking up functions that have been given only to Indian vendors.