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Call Center News
Data theft, rising costs and high attrition threaten to harm India's
reputation as a safe outsourcing destination - India Daily
December 30, 2006 :
The outsourcing to India is growing at a rapid pace as IT sector is
hiring with full force. The software outsourcing and call center sectors
grew rapidly as companies hired at a crazy pace and outlined massive
expansion plans in the SEZ frenzy, but a few incidents of data theft
threatened to harm India's reputation as a safe outsourcing destination
during 2006.
In an otherwise bullish scenario, the only dark cloud was data theft
from a few call centers, including at HSBC's India office. This raised
serious concerns among foreign investors, so much so that Prime Minister
Manmohan Singh had to assure them during his visit to UK in October that
India was a safe outsourcing destination.
Besides data theft, other factors such as rising costs and high
attrition also forced a few companies such as Acme TelePower and British
energy firm Powergen to close their BPO operations in India.
However, various studies by research firms still indicate that India
will maintain its low-cost IT skills leverage in the offshore
outsourcing market for another 20-30 years, though growth may slow down
amid concerns of security breach.
Strong demand over the past few years has placed India among the fastest
growing IT markets in the Asia-Pacific region. The software and BPO
industry has been growing at an average of 25-30 per cent during the
last few years. At this pace, it looks all set to achieve $60 billion in
exports alone by 2010 from just $13 billion in 2003-04.
But this rapid hiring raised alarm bells, with top HR officials, NASSCOM
and even the Government expressing concern over the shortage of trained
manpower that the sector could face in the next two-three years.
The Government's concerns emanated from the big expansion plans outlined
by companies big and small under the new Special Economic Zones policy.
This was especially because the SEZ policy offered huge tax sops and the
Software Technology Parks of India scheme will expire within three years
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