| Industry analysts have been predicting for | | | | India. |
| months that India's capacity for taking in | | | | RCG Information Technology is another large IT |
| American outsourcing work is starting to stretch | | | | service provider. They have stated clearly that |
| its limits. The government has always taken steps | | | | they do not intend to make India a part of their |
| to restrain continuing growth, but now we're | | | | strategy for the foreseeable future. Instead they |
| seeing the American companies taking action. | | | | have targeted the Asia Pacific region for further |
| They are deliberately moving some of their | | | | expansion and already have a presence in the |
| outsourcing capacity to the next-step destinations, | | | | Philippines. Their analysis revealed that India's |
| such as the Philippines, China and Vietnam. | | | | prices are rising, due to the overcrowding of |
| India's government was right to try to restrict | | | | clients there. Employees are jumping from one |
| growth, because the resulting rise in costs is now | | | | firm to another to get better pay. This is causing |
| being realized and passed on to the American | | | | overall prices to increase, while skill levels sink. |
| companies. | | | | They have found English communications skills to |
| Sykes is a large US-based contract center and IT | | | | be superior in the Philippines. |
| support organization with operations in both India | | | | Hewitt has begun hiring for its new BPO facility in |
| and the Philippines. It has recently announced it will | | | | the Philippines. So has HSBC, the international |
| move much of its capacity from India to the | | | | banking concern. On the flip side it has been |
| Philippines. For a company of this size to make | | | | reported that Indian nationals working here in the |
| this drastic of a move means the price differential | | | | United States are being wooed to go back to |
| is substantial. | | | | India, where demand for their work is high. They |
| GXS is another global business-to-business service | | | | are having trouble doing so, however, because |
| provider who is moving operations with strong | | | | their salaries are traditionally so much lower than |
| customer service components to the Philippines. | | | | in the U.S. This, too, is contributing to India's |
| They have found better economics and results | | | | increasing rates, as they start to face the |
| there. They're leaving their product development | | | | downside of fiscal globalization. |
| operations in India. Overall, they feel that this | | | | But don't count India out yet. India created the |
| arrangement minimizes risks. | | | | offshore outsourcing model and its continued |
| A recent investment decision is further evidence | | | | managerial competency will drive it forward. It still |
| of the growing interest in the Philippines as an | | | | dominates and enjoys a fine reputation and |
| outsourcing destination. Ambergins Solutions, a | | | | attractiveness worldwide. Its current growth |
| large call center operation, just received an | | | | slow-down does not indicate weakness but, |
| investment of $43.5 million from a Canadian-based | | | | rather, great success. If places like the Philippines |
| global IT solutions provider. A company source | | | | and Vietnam have not been quite as successful, |
| said the Asian Pacific region appeared to be the | | | | they are learning from India how to attract their |
| best long-term opportunity of anywhere, including | | | | share of quality and sizable outsourcing employers. |