Siliconeer: April 2005

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APRIL 2005
Volume VI • Issue 4

PUBLISHER'S NOTE:


From time to time, this magazine has taken a break from celebrating India’s remarkable leap into the global arena with its knowledge prowess in information technology. Two issues interest us most—one is whether any of this technology is being molded to serve the vast millions who are left out of the globalization party. The other is to take a close, hard look at whether there are any downsides to the IT revolution that is getting lost in the euphoria and hype.

This month’s issue takes on the second issue—and revisits a trend we looked at in April last year: The growing problem of e-waste, and what is being done about it. While last year we looked at the national picture, with attempts by the West to dump their electronic junk, this month’s issue looks at Bangalore’s e-waste problem. It’s pretty grim, and the bizarre thing is that its IT-savvy population seems blissfully unaware.

However, there is a silver lining to this story. Germany and India have joined hands to deal with the problem, and with German know how, a properly built facility will be constructed as landfill for electronic junk. However, local residents are not thrilled at the prospect of having a hazardous waste landfill in their midst, so government agencies are scrambling to woo them and assuage their fears.

We present a light, fun story of a sports competition with a difference: a robot-sports contest. What’s the South Asian angle, you ask? It’s our young reporter Neil Gupta, all of 14 years old. We thought it would be fun to give readers an example of how science can excite our youngsters.

Did you know that both the Maharashtra state government and the Manmohan Singh-led coalition government at the center have an ambitious plan to give Mumbai a makeover?

Their model was Shanghai, the city whose blistering growth is a symbol of the amazing dynamism of resurgent China. However, it’s one thing to plan, quite another to execute it in a complex democracy like India.

Political compulsions have thrown a spanner in the initial plans, and now it’s unclear when Mumbai will actually get the radical makeover its proponents dreamed of. We present a detailed story in this issue.
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MAIN FEATURE:
Taking on E-Waste: Bangalore Battle
A Siliconeer Report
If you think Bangalore's IT revolution is about to take India into the next age, hold your applause. There is another side to the IT revolution that few talk about. A huge pile of electronic junk is creating a long-term hazard. Now HAWA (Hazardous Waste Management Project), an Indo-German joint collaboration, is taking on the challenge by building a facility at Dobbospet, 45 km from the city. A Siliconeer report.

A time bomb is ticking in Bangalore, India’s hi-tech capital, but most of its six million inhabitants are largely unaware of the threat,” the BBC reported in a recent article on its Web site. “Home to more than 1,200 foreign and domestic technology firms, Bangalore figures prominently in the danger list of cities faced with e-waste hazard.”

As many as 1,000 tons of plastics, 300 tons of lead, 0.23 tons of mercury, 43 tons of nickel and 350 tons of copper are annually generated in Bangalore. More than 300 small industrial units operate in metal extraction waste from dumped computers.

The German government has stepped in with an innovative program to take on the challenge. Advisory Services in Environmental Management — ASEM — is a joint program of the Indian Ministry of Environment and Forests and the German Agency for Technical Cooperation — GTZ. (See box)

It is helping the Karnataka State Pollution Control Board implement HAWA — a Hazardous Waste Management System (See box) — and develop a TSDF — Treatment, Storage and Disposal Facility — which will be in the centre of a system of disposal and management of hazardous wastes. The focus will be on waste minimization and abatement efforts in the generating industries as well as recycling and reuse of waste.

”The increasing settlement of manufacturing industries and the rapid development of the economy in Karnataka are leading to state courts and the Supreme Court taking actions concerning the consequences of uncontrolled disposal of industrial waste,” ASEM says in its Web site.

While the volume of hazardous waste generated is relatively slight by comparison with other states, ASEM says that in view of the uncontrolled disposal it represents a high hazard potential for human health and the environment. Contamination via water, soil and the atmosphere leads to destruction of the ecological balance.

“Moreover, it is above all the poor population groups who live in the vicinity of hazardous waste producing industries or along sewer lines, or who enter into contact with hazardous wastes as a result of illegal waste disposal sites, which are most severely affected,” says ASEM. “In addition, pollution of water resources leads to diseases, particularly among the poorer population groups who are unable to afford hygienically safe drinking water. Such diseases can also be triggered by accumulation of pollutants in the food chain.”

Domestic e-waste including computers, refrigerators, televisions and mobiles contain around 1,000 different toxic materials. Beryllium, found in computer motherboards, and cadmium in semiconductors are poisonous carcinogens. Chromium in floppy disks, lead in batteries and computer monitors and mercury in alkaline batteries and fluorescent lamps also pose severe health risks.

Alarmed by the electronic pile up, Bangalore resident Shetty Sreenath has set up Asia’s first e-waste crematorium, the Indian Computer Crematorium, in India’s technology hub.

“Here we neither bury nor burn electronic waste. It is done through a mechanical dry recycling process,” he told the BBC.

Meanwhile, HAWA is facing hurdles setting up its facility in Dobbespet. Its proposed facility in Shidlaghatta is locked up in litigation. In Dobbespet the local community is up in arms because they aren’t thrilled with the idea of having a hazardous waste disposal facility in their neighborhood, unsure of its effect on their soil and groundwater.

Facility builders have responded with a six-month training program for the local population in a 5-km radius of the site to educate them on the scientific features and safety aspects incorporated in a modern landfill and more such programs are in the offing. Religious leaders, the local elected body and NGOs are also involved in these programs.

The Dobbespet project in terms of the technology of the landfill and transportation provisions of hazardous waste will meet European environmental regulations, which standard-wise are superior to Indian regulations.

The life-span of the project involves a 20-year operational period and 30-year post operational period. One company will be authorized for the collection of hazardous waste from all their generating industries.

German project advisor Jurgen Porst is urging patience and he estimates the project is likely to become operational by mid-2006.
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INFOTECH INDIA


Gayoom Visits Technopark ... Nokia Plant in Chennai ... 30 Firms on Forbes List ... Tibco to Hire ... Accenture’s New Facility ... Weather Warning in Coastal Villages ... Satyam Voted Third Best ... Chennai Makeover ... Maritime Varsity Here is the latest on information technology from India

Gayoom Visits Technopark
Maldives President Maumoon Abdul Gayoom visited Technopark, Kerala’s premier information technology park in Thiruvananthapuram April 1 morning.

Gayoom, who reached the park at 10 a.m., went around the units of Infosys and U.S. Software. He was given a presentation on the activities of Technopark at the administrative office.

The president, accompanied by his wife Nasreena M.A. Gayoom and his official entourage, spent some 45 minutes at the park.

Earlier, he was received by IT Secretary and Technopark chairman P.H. Kurien and its CEO-in-charge V.J. Jayakumar.
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Nokia Plant in Chennai
The Tamil Nadu government and mobile giant Nokia April 6 signed a Memorandum of Understanding for setting up its first mobile handset manufacturing unit in the country, Chief Minister J. Jayalalithaa said in Chennai.

She told the State Assembly that the manufacturing unit would be located at Sriperumbudur SIPCOT Industrial Estate in Tiruvallur district.

Nokia is expected to invest $150 million in the first stage and an equal investment is in order to set up ancillary units, providing direct employment to 1,200 persons and indirect employment to 6,000 more persons.

The unit will manufacture 24 million mobile phones per annum initially and the handsets will be for sale in the domestic and the export markets, she said.

The site where the ancillary unit would be set up will be declared as Special Economic Zone.

Nokia, after inspecting several places in the country, zeroed in on Sriperumbudur, she added.

Meanwhile, Lauri Vesalainen, vice-president, operations and logistics, APAC, Nokia, declined to comment on the chief minister’s statement that 24 million mobile phones would be manufactured here initially. He also declined to comment on whether the site would be declared as a Special Economic Zone.

Mobile penetration in Asia Pacific is expected to be a major contributor to the global mobile subscriber base surpassing the two billion mark in 2006. Therefore, India, which is set at the heart of the region where mobile communications is growing rapidly, was a natural location of choice for the new production facility.

In India, Nokia is the market leader in mobile devices. Nokia maintains sales, marketing, customer care, and research and development sites in the country. Nokia was recently recognised as the Brand of the Year by the Confederation of Indian Industry as well as the most respected consumer durables company by the BusinessWorld magazine.
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30 Firms on Forbes List
The Oil and Natural Gas Corporation leads 30 Indian companies which have found a spot on the Forbes magazine’s list of the top 2,000 corporate titans across the world.

The Indian companies in oil and gas and banking sectors dominate the list, which includes corporations ranging from manufacturing and software to utilities and telecommunications sectors. ONGC occupies the 265th position, closely followed by the State Bank of India group listed at the 269th and Indian Oil at 273rd positions.

The rankings are based on four criteria: sales, profits, assets and market value.

Citigroup tops the world list, followed by General Electric, American Intl Group, Bank of America and HSBC group. Other Indian companies on the list include Reliance (309), National Thermal Power (486), ICCI Bank (757), Steel Authority of India (831), Bharat Petroleum (914) and Hindustan Petroleum (1,011). Following them are Tata Consultancy (1,167), Punjab National Bank (1,186), Gail (India) (1,250), Infosys Technologies (1,250), Canara Bank (1,260), Tata Iron and Steel (1,302), ITC (1,336) and Wipro (1,362).

Further down the scale are HDFC (1,364), Bank of Baroda (1,370), Bank of India (1,371), Tata Motors (1,519), Union Bank of India (1,618), Bharat Televentures (1,648), Oriental Bank of Commerce (1,811) and Mahanagar Telephone Nigam (1,835).

At the bottom of the listing for Indian corporations are Bharat Electricals (1,907), Ranbaxy Laboratories (1,936), Indian Overseas Bank (1,959)and Hindalco Industries (1,982). Larsen and Toubro just made the list at the 1,996th position.
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Tibco to Hire
Tibco, a U.S.-based software integration company which set shop in India two years ago, plans to hire over 125 employees by this November.

The company is ramping up product development work at its Pune centre and is building up a marketing team for the domestic market.

“The Pune development centre would be key to Tibco’s expansion plans and the developing of future products,” Ram Menon, senior vice president, worldwide marketing, Tibco, said.

The company, with 1,500 employees worldwide, had revenues of $387.2 million with an operating margin of 22 percent in the financial year ended November 2004.

“We expect to add about 10 Indian clients in 2005 and we will be opening our marketing office in Delhi shortly,” Anup Varma, country manager, India, said. The company has HDFC Bank, BSE, Tata Teleservices, Reliance Telecom and UTI Technology Services as some of its Indian clients.

In India the company is targeting the banking and financial services sector, telecom and government organizations and departments.

“Tibco’s software helps companies distributing market and trade data through their front, middle and back office. Banks use the software to achieve a better view of their customers and automate activities and insurance companies use the software to accelerate claim processing,” Menon said giving examples of applications.
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Accenture's New Facility
Accenture, a global management consulting, technology services and outsourcing company that has a technology delivery centre in Hyderabad, will be moving to a new facility by June this year.

The new facility will be bigger than the existing one and the company, therefore, is likely to increase its headcount in Hyderabad by a significant number.

Addressing a press conference, Chet Kamat, partner, Accenture, and head of the company’s delivery centers in India, said, “We started our operations in Hyderabad in 2003 and have been working from an incubation facility. We will be shifting to a permanent facility at Mindspace IT Park by June this year.”

“This apart, we will also be indulging in entry-level hiring from engineering colleges across the country. So we will be visiting campuses in this regard soon,” he added.

Accenture, so far, has been recruiting only experienced professionals for its IT services and the company has strategically decided to now start employing entry-level people from engineering background.

Globally, it has a workforce of 1,06,000 people in 48 countries.
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Weather Warning in Coastal Villages
Rural Knowledge Centers in Tamil Nadu, set up jointly by the M.S. Swaminathan Research Foundation and the Indian Space Research Organisation, will soon have weather warning services for the fishermen in the coastal villages.

“Though the project is in pre-mature stage, these centers are expected to offer weather services like early warning and extreme weather information dissemination mechanisms, location specific forecasting,” associate director of MSSRF, S. Senthilkumaran, told reporters.

Currently, RKCs provide information on agriculture, health, education, government entitlements, micro-enterprise training, among others.

The RKCs, set up based on a VSAT network, located near the coastal areas, played a major role immediately following the first tsunami attack Dec. 26 and in post-tsunami relief, he said.

“We set up a temporary centre at a fisherman’s house at Akkaraipettai village in Nagapattinam. It was very helpful in informing the people about the possibilities of a tsunami attack in the Indian Ocean,” he added.
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Voted Third Best
Satyam Computer Services Limited has been voted as the third best company in corporate governance in India in a survey conducted by Asset Benchmark Research.

Expressing happiness, Srinivas Vadlamani, chief finance officer, Satyam Computer Services Limited, said in a press release, “We are happy to receive this recognition. Corporate governance assumes a great deal of importance at Satyam. The driving forces of corporate governance at Satyam are its core values, belief in people, entrepreneurship, customer orientation and the pursuit of excellence.”

According to the press release, the survey covering more than 110 global institutions investing in the Asian equity markets asked the investors to nominate up to six companies demonstrating exceptional corporate governance.
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Chennai Makeover
The Chennai Port Trust will set up a second container terminal, a multi-level car parking facility, a desalination plant and a 15 MW windmill as part of an aggressive expansion plan, union Shipping Minister T.R. Baalu said in Chennai April 6.

The multi-level car park facility, for which 67 acres of land have been acquired, would have a capacity to park 80,000 cars, Baalu told a news conference. This was aimed at the many car manufacturers in Chennai, including Ford and Hyundai, who use the port for exporting cars.

The second container terminal would be established on build-operate-and-transfer basis and would enable the port to handle the increasing cargo traffic in future.

The proposed desalination plant, which was expected to cost Rs. 48.50 crore, would have a capacity of one million litres per day.
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Maritime Varsity
A Maritime University, an institute for training mariners on various aspects relating to the sea including the types of vessels to be used, will be established in Chennai, union Minister for Shipping, Road Transport and Highways T.R. Baalu said April 6.

The Central American country of Panama will provide the necessary assistance for setting up the university, Baalu told a news conference here.

The vice-president of Panama would visit the country next month for signing the accord, Baalu said, adding that the setting up of the university would be subject to the approval of the union cabinet.

Baalu said the proposal for the Maritime University was discussed with the officials of Panama during his visit to the Latin American country about two months back. “They have now come forward to sign the MoU,” the minister said.
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POPULAR SCIENCE
Sports with Robots: Contest with Difference
- By Neil Gupta

Two teams are facing off in a quarter final match. (Matthew Jojola/California Aggie Photo)

From across North America, 37 high-school teams joined a contest of robots, writes Neil Gupta.

Seven seconds remaining. Five goals are capped by the red team, while the blue team owns the other four goals. Two of the six players have dropped out of the round from being knocked over. Three… Two… One… The bell rings and the stadium erupts with cheers and rapid discussion.

Sound like any ordinary sports game? Well, you might be surprised to hear that this description comes from one of this year’s many robotics competitions that are being held across the nation. Hailing from across the U.S. and Canada, 37 teams gathered on March 5-6 at the Pavilion at the ARC for the Sacramento Regional For Inspiration and Recognition of Science and Technology — FIRST — robotics competition. The Sacramento regional is only one of the many regional competitions that are open to teams that wish to advance to the nationals, which will be held in Atlanta later this year. Contrary to popular belief, these competitions are not unlike any other sports game. Team members could be seen with dyed hair and colorful costumes, cheering their teammates on and displaying their team spirit.
The Robot goes to score point for blue alliance. (Matthew Jojola/The California Aggie Photo)

“The competition is a celebration of science and technology,” regional director Jim Beck said. “The event was outstanding and simply incredible.”

Every year, FIRST plans and designs new games that qualified engineers can compete in by controlling a robot built within a six-week period. Rules and basic kit parts were shipped to every team in January for teams to begin working. To add another interesting twist, only high school students can participate in the event. Teams consist of a group of students and a teacher to supervise in case of emergencies. Designed and built entirely by students, the robots competed in this year’s challenge with great enthusiasm and success.

This year, the competition placed the high schools in a rotating alliance system, called “Triple Play.” Each round, three teams were randomly matched up to create an alliance that battled against another alliance to win the round. Winning teams increased their rank in the pool of teams and the top eight teams were selected to move on to the elimination rounds. After a series of rounds that lasted two days, the top eight teams were given the privilege to choose two other teams as their partners for their alliance in the elimination rounds. All remaining teams that were not selected were removed from the game. The rounds consisted of 2-minute, 15-second games, where the three robots on each alliance had to pick up tetrahedron-shaped game pieces, called tetras, and place them either above or below nine pyramid-shaped goals that were located on the field in a grid format. The tetras could be stacked on top of the goals and the upper-most color owned the goal. Points were awarded to every tetra above or below the goal, as well as extra points for owning a goal. Also, additional points were given if a team owned an entire row of goals, similar to a game of Tic-Tac-Toe. In the elimination rounds, teams were eliminated on a “best of three” basis.

Neil Gupta, a freshman at the Harker School, has been a member of the Harker Robotics team for three months now. He is 14 years old and resides in San Jose, Calif.
Although the game may sound like an intellectual battle over the best robot design, the game was surprisingly intense, while still remaining friendly.

The founders of FIRST have placed a great hope in the participants of the annual competitions, stressing that if students could build such advanced robots in six weeks, imagine what could be done in six years. Due to this motivation, they continue to develop new challenges for the students and encourage participation.

The judges gave out 15 awards, ranging from the Team Spirit Award to the Industrial Design Award. The Sacramento Regional Champion awards went to Harker Robotics of Harker School, the M-A Bears of Menlo-Atherton High School, and the Adambots of Rochester Adams High School. These three teams made an extraordinary alliance and remained undefeated throughout the entire elimination rounds.

The stadium was filled with music and cheering as several teams danced to the songs in between rounds and displayed their spirited costumes. Even the judges were seen dancing to songs, such as “Macarena.” Deafening cheers rang through the halls as teams encouraged their human players and celebrated their victory.

“The energy of the event was incredible,” said a member of the Adambots team as the team members celebrated their victory. “It’s all about having fun.”-Inder Singh is president of the Global Organization of People of Indian Origin
and chairman of Indian American Heritage Foundation. He lives in Los Angeles.
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Outsourcing Digest:
Siliconeer presents of the latest news from the world of outsourcing.

BPO Workers Happier ...
IT Friendly Bush ...
Lehman to Open Hub in Mumbai ...
Lawmaker to Cut Outsourcing
...
Outsourcing Risky: Gartner
Battle to Keep Staff ...
Design Outsourcing ...
BPO Unit in Mangalore ....

BPO Workers Happier
Staggering growth is often a recipe for employee dissatisfaction, as the IT industry has seen in 2003-04. But the $4 billion business processing services industry in India has managed to defy this equation. Despite over 45 percent growth in the number of employees in India’s BPO industry in 2003-04, overall employee satisfaction actually improved in 2004. The satisfaction score rose 9 percent over last year, in the annual Dataquest-IDC BPO E-Sat (Employee Satisfaction) Survey, 2004. Daksh services emerged as the top employer in the survey this year, as opposed to its fifth position last year.

There is often a disconnect between salary and satisfaction with salary. Daksh emerges at the top of the pile in terms of employees’ cost to company and yet, ranks quite low on employee satisfaction with salaries. And despite this, the employees show a very high overall satisfaction level.

And size really does matter. “BPO saw a further flight to scale this year,” said Dataquest Group president, Prasanto K. Roy. “The larger companies have shown not just higher growth rates but have also managed to keep employees happier.” The five largest companies in the survey averaged a satisfaction score of 85, versus the industry average of 81, while the smaller companies stayed in the 70s. Roy added that unlike in the IT industry, money is a huge motivator in BPO. “Salaries replacing higher education as the top reason for leaving a company serves as a reminder of the trend.”

The BPO Employee Satisfaction Survey 2004 covered the spectrum of the Indian BPO industry. The information in the survey was captured through face-to-face interviews with employees of participating companies.
|Back to Outsourcing Digest|
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IT Friendly Bush
As America braces up to a second term verdict for George W. Bush, Indian software industry is looking up towards the U.S. as a long-term ally and partner when it comes to business in the IT sector. Industry pundits in the IT and the BPO sector are quick to congratulate Bush and at the same time are positive that the outsourcing outcry will die down.

Speaking about the impact of U.S. elections on the burgeoning IT industry in India, Nasscom president Kiran Karnik said that the Indian IT industry welcomes the re-election of George W. Bush as the president of the largest democracy in the world. The U.S. is the powerhouse of the global economy and the Indian IT industry is delighted in being a partner of U.S. corporations, helping to make them more competitive.

“Software exports to the U.S. from India account for 68 percent of our total software exports and have been growing at around 30 percent a year. We are confident that with George Bush getting re-elected, the growth momentum will continue,” he added.

India is now expecting that policy makers within President Bush’s administration will take cognizance of ‘business economics,’ as they have done earlier. Research reports by various think tanks and academic institutions in U.S. have already shown that the U.S. economy gains by offshoring work and job loss, if any, due to outsourcing from the U.S. is very small.
|Back to Outsourcing Digest|
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Lehman to Open Hub in Mumbai
Lehman Brothers has announced its plans to set up an outsourcing center in Mumbai which will be engaging staff in the hundreds. According to the Business Standard:

“The centre will be an enterprise-wide operation handling both BPO and software development work. As far as BPO work is concerned, it is a sort of returning to India by Lehman as it had earlier ended its voice business engagement with Wipro Spectramind.”

At that time Charlie Cortese, MD for information technology, Lehman Brothers Holdings, had said the company was not ending or pulling back on outsourcing and asserted that “overall numbers involved in outsourcing will go up next year.”
|Back to Outsourcing Digest|
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Lawmaker to Cut Outsourcing
State assemblyman Richard Brodsky of Weschester, N.Y., is raising quite a stir by introducing a bill that would prevent companies who receive New York state tax subsidies from moving jobs out of the state. While the legislation is clearly an attempt to curb offshoring internationally, the wording of the bill may prevent large companies from even transferring work to other states. Assemblyman Brodsky has made the case that this bill is not intended as a block against outsourcing altogether, but that it simply stops outsourcing from being subsidized by the state. Many critics argue, however, that the bill will hurt corporate profits in the region and ultimately cost the state more jobs than it saves. According to Newsday: “The legislation proposed by state Assemblyman Richard Brodsky of Westchester would prohibit companies from sending jobs out of New York if they received tax breaks or other financial incentives from the state. A violation of the legislation would require a company to repay whatever benefits it was awarded, and ban it from receiving further state financial assistance for five years.”
|Back to Outsourcing Digest|
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Outsourcing Risky: Gartner
Around 80 percent of companies that outsource customer service projects to cut costs will fail by 2007 because of high staff attrition rates and many of them neglect to manage their outsourced operations, research firm Gartner has predicted.

“Companies are not looking at processes from a customer point of view and this is risky,” said Gartner research director Alexa Bona. Companies that outsource internal functions such as human resources and finance, don’t have the same level of exposure because problems are dealt with by their own staff, Bona said.

Gartner predicted that through 2008, some 60 percent of companies that outsource customer-facing functions, will face client defections and hidden costs that outweigh any potential cost savings.

It, however, predicted that the customer service outsourcing market would continue to grow, from $8.4 billion in 2004 to $12.2 billion in 2007.
|Back to Outsourcing Digest|
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Battle to Keep Staff
Indian back-office firms face a growing challenge holding on to employees, even as they hire tens of thousands every quarter.

Some firms say they need to replace up to half their people every year. Call centres, which snap up English-speaking youngsters with the gift of the gab, are the worst hit, and they account for nearly 40 percent of back-office jobs in the country.

“It is a major problem,” said Jerry Rao, chairman of back-office and IT services firm MphasiS BFL Ltd.

Staff tend to account for half of a back-office operation’s costs, according to research firm Evalueserve, and the battle for talent has led to a 10-15 percent rise in employee salaries.

Recruitment and training makes up 3 percent of the overall per employee cost of about $13,000 per year, including administration and telecoms costs, according to Evalueserve.

But the really damaging cost is the lost business for companies who cannot fill key jobs quickly enough. Many face a shortage of mid-level manpower to manage their rapid growth as they lure clients with promises of 40 to 50 percent cost savings.

As the industry clocks up 50 percent-plus growth, demand for quality personnel is outstripping supply. Employees often hop to new jobs for slightly more money, and many do not view back-office work as a career.
|Back to Outsourcing Digest|
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Design Outsourcing
The second wave of outsourcing to India, which is just beginning, includes skill-intensive manufacuring such as software design.

According to Express India: “U.S. companies, which have development centres in India, are increasingly outsourcing industrial and engineering tasks to India.”

“The last few years have definitely seen increased activity in the Indian CAD/CAM/CAE space with MNC product vendors realising the importance of India as a cost-effective destination for outsourcing CAD/CAM/CAE work,” said an industry observer.

India has the expertise in 3D modeling and plant engineering in sectors like aerospace, automotive and industrial machinery. In the automotive sector, according to industry sources, 15 global car makers, including GM, Ford, Daimler Chrysler, Mercedes-Benz, Audi, Isuzu and Nissan, have set up outsourcing offices in the country, with a combined budget of approximately $1.5 billion.

With the offshoring of general IT services becoming an ever more mature market in places like India, a number of outsourcing companies are trying to take the next step in service providing, Vertical IT Outsourcing.

IT service companies which formerly had the capacity to offer only general IT services, are becoming specialized, and thus more attractive, by teaming up with other firms which also provide services in the same industry according to a report of the Manila News.India daily reports.
|Back to Outsourcing Digest|
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BPO Unit in Mangalore
MphasiS will open its third business process outsourcing facility in the country at Mangalore next month.

Addressing reporters here, the Chairman and Chief Executive Officer of MphasiS, Jerry Rao, said that nearly 3,000 people would be employed in the Mangalore unit over a period of time.

Bhaskar Menon, president of MphasiS BPO Services, said that around Rs. 75 crore would be invested in the Mangalore unit.

Stating that establishment of a BPO unit will create huge employment opportunity in the region, he said the company wants to hire around 3,000 people in 18 months time from March. In all, it wants to employ around 12,000 people in its BPO units.

Rao said that the company chose Mangalore for its third BPO unit because of the region’s outstanding human capital. Literacy rate in Dakshina Kannada is very high.

Apart from numerous first grade colleges, the district also has quite a few good technical education institutions. Most of the youth here are well acquainted with English and various technology platforms.

Before selecting Mangalore for the BPO unit, Hewitt had conducted a survey on behalf of the company, he said. Establishment of BPO units will also lead to secondary and tertiary employment generation.

Rao also thanked the Karnataka Government for waiving entry tax on export industry.
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GLOBALIZATION:
Mumbai into Shanghai: The Stalled Makeover
By Siddharth Srivastava

Democratic compulsions have put the brakes on an ambitious plan for a makeover of Mumbai along the lines of Shanghai, writes Siddharth Srivastava.

One big difference the way China and India is developing is the encumbrance of politics that becomes inevitable in a vibrant democracy like India. The most recent casualty: the Mumbai-Shanghai plan. This is an ambitious bid to convert India’s commercial capital into an approximation of Shanghai as India scrambles to catch up with its giant Asian neighbor’s torrid economic progress.

However, what’s a piece of cake in China is anything but that in India. The plan has stuttered even before it has begun — exigencies of power and vote bank politics have thrown a spanner in the works.

In any case, Mumbai is anything but an approximation of today’s Shanghai. Pollution, encroachments, traffic congestion, unplanned urbanization have taken its toll, made worse by the sea of slum dwellers who have been coddled by political parties of every hue because they are a rich source of votes.

The rows and rows of slums that adjoin Mumbai airport are not a palatable first glimpse of the city that greets the international traveler as the plane lands. On the other hand, Pu Dong airport in Shanghai is state-of-the-art: the Maglev — magnetic levitation — train is the fastest rail system in the world, whisking passengers in Shanghai within minutes across what would be a two-hour ride for similar distances in Mumbai. If you are lucky, that is. If you aren’t (which is often), then you will get caught in a traffic jam, and even Ganpati cannot tell when you will get to your destination.

No matter. The Maharashtra government and corporate houses including McKinsey have studied the feasibility of modernizing Mumbai with Shanghai as the model. The studies have revealed that n additional annual investment of $5 billion will be needed till the year 2013 to turn Mumbai into a world-class city.

The Shanghai-Mumbai bugle was first sounded by Prime Minister Manmohan Singh in October last year. “When we talk of a resurgent Asia, people think of the great changes that have come about in Shanghai. I share the aspiration to transform Mumbai in the next five years in such a manner that people would forget about Shanghai and Mumbai will become a talking point,” the prime minister said.

After a Congress-led government came to power, the Maharashtra government unveiled a $6.5 billion plan to rebuild Mumbai into an international city like Shanghai.

Delhi offered $2 billion over the next five years for turning the city around. Transformation plans included the Mumbai-metro rail link, the trans-harbor project, the ring railway plan and Wadala truck terminus project, removal of encroachments, beautification of the international airport at Mumbai, the Mumbai-urban infrastructural development and the upgradation of King Edward Memorial Hospital.

Maharashtra Chief Minister Vilasrao Deshmukh spearheaded the Mumbai-into-Shanghai plan, seeking even more New Delhi largesse.

Slum demolitions have followed, leaving over 200,000 people displaced as the government tried to free up prime real estate for development. According to reports, over 50,000 shanties have been demolished in a few weeks as the administration bulldozed 200 acres of illegally occupied government land, and that was just for starters. Slums built after 1995, located in prime locations, were to be demolished with the inhabitants transferred to government provided housing outside the city area. This step was also in agreement with a government statute in 2002 that made slum construction post-1995 a cognizable offense.
That’s when the big arm of politics — read exigencies of retaining vote banks — caught up with Deshmukh. In a clear reminder that development and governance can often be at loggerheads with politics, Congress party president Sonia Gandhi summoned Deshmukh to Delhi for a dressing down. The final word was that slum demolitions were contrary to the Congress party’s pro-poor image. Now the cut-off date for slum demolition has been revised to 2000, which pretty much retains the status quo in the overpopulated and congested metropolis.

A much-subdued Deshmukh said his government would focus on the human side of development while carrying out all-round development of the city to improve the quality of life; he said the action program would include rehabilitation of residents in slums which have come up before 2000.

That’s not all. In the budget unveiled for the next financial year, the much-hyped national urban renewal mission, aimed at changing the look of seven mega-cities and 28 cities, will be getting all of $1.1 billion, a far cry from the $30 billion earlier touted. The three Mumbai projects mentioned by Finance Minister P. Chidambaram in his budget speech — metro rail, the trans-harbor link and western freeway sea link — each requires more than the entire allocation for completion.

While it is true that any development should incorporate a human face, hard decisions sometimes need to be taken. It is perhaps a pitfall as well as a blessing of democracy that the voice of the common man has to be incorporated before hard economic decisions based on data and statistics are taken. According to The Hindustan Times: “Clearing a city (Mumbai) of slums is about economics. Shantytowns are choking Mumbai’s infrastructure development. But it is also about politics. People lose homes and they have votes. The way to take care of the politics is to offer, as it were, a concrete proof of the government’s commitment to those affected by demolition…Mr Deshmukh was brave to start the drive. He will be braver if he can start off, again, differently.’’

Perhaps the prime minister’s dream to turn Mumbai into Shanghai will happen, but not at Shanghai’s blistering pace. Democracy often means taking the staircase to economic success, not the elevator, as in China. Hopefully, the sacrifice is worth it. It’s almost certainly is more humane.

- Siddharth Srivastava is India correspondent for Siliconeer.
He is based in New Delhi.

|TOP|


REPORT:
A NASA Fantasy: Boy Wonder Who Wasn't -
By Siddharth Srivastava
The Indian media went to town with a village kid's dubious claim. The sordid saga has a sobering lesson, writes Siddharth Srivastava.

Fifteen-year old Saurav Singh (inset) was the toast of India just a few weeks back. The face of the kid from a remote, backward village of Uttar Pradesh’s Ballia district was splashed on television screens and the front pages of national newspapers. Gushing reports said that Singh had topped an exam conducted by the U.S. National Aeronautics and Space Administration, the so-called prestigious International Scientist Discovery exam.

In a matter of days Saurav got a congratulatory note from President A.P.J. Abdul Kalam. Uttar Pradesh state lawmakers pledged one day’s salary. Saurav’s was a heartwarming story — of a young boy from a poor family in an Indian village fighting against social and economic odds, and triumphing.

A coaching institute in Rajasthan claimed that Saurav had been their student and said that the boy got a rank higher than the late Indian astronaut Kalpana Chawla (21st), and Kalam (7th), the only two other Indians to have cleared the said exam. Saurav, in the meantime also became a hero of the non-resident Indian community very active on the Internet, who hailed his success and pledged funds for his trip to the U.S.

There was just one hitch. All of this seemed to be news to the folks at NASA. The U.S. agency denied it ever conducted an exam called ISD and knew nothing about Saurav. A nonplussed Saurav said that it was not the NASA exam that he had cleared but Oxford University. However, there is no mention of the International Scientist Discovery in the Web sites of Oxford, or the British daily Guardian. The only mention of this “international” exam on the BBC Web site was in a story datelined Ballia about Saurav.

Currently, Saurav is being interrogated by the police, while the people of his village have taken to the streets claiming that all of this is a conspiracy by larger forces including NASA to malign their boy.

The bigger question, of course is: How did Saurav’s story create the media frenzy for as long as it did, given the false claims? Fingers are being pointed at the media which has been accused of sensationalizing news without cross-checking facts. Accusations are flying about that the Indian media as well as the community has a habit of exaggeration.

Writing in The Times of India, Washington correspondent Chidanand Rajghatta says: “Hopefully, the Saurav Singh episode will have a salutary effect on the new brand of ‘gotcha’ journalism coursing through the Indian media. What the incident demonstrated is the media’s hunger for creating instant heroes and the value of the foreign cachet in doing this. If it’s NASA, it must be a phenomenal achievement, is the unchallenged reasoning, forgetting that it’s probably harder to qualify for some of India’s engineering schools.”

Rajghatta presents other myths that have been promoted by the Indian media in the past, one of which is that 35 percent of Microsoft’s work force and 32 percent of NASA personnel were of Indian origin, though the figure stands between 5-10 percent — still a very high proportion, given the total number of Indians in the USA.

India’s recent prominence, particularly in information technology, is no mean achievement, but it must not obscure the fact that in the broader context India remains a poor underdeveloped country with massive swaths of backward areas and millions of poor.

The latest Forbes list puts things in perspective, highlighting the fact that India is a land of contrasts and inequalities. In the list of the world’s billionaires put out by Forbes India ranks 8th in terms of the number of billionaires and 9th in terms of the total wealth of the super rich, ahead of several “rich” countries. But, in contrast to other nations, the average Indian billionaire’s wealth is equivalent to almost 9 million times the country’s per capita GDP. The average Norwegian billionaire’s wealth is only about 42,000 times his country’s per capita GDP and for most of western Europe, the figure is either in tens of thousands or hundreds of thousands.

Perhaps the sobering, salubrious lesson in this sordid saga will be a greater reluctance to hype any and all achievements, particularly those with a phoren whiff about it. First of all, it is imperative to avoid the egregious error of hyping phony achievements — in fact, in this age of the Internet it is astounding how long the Indian media allowed itself to be bamboozled when a few clicks in Google are enough to raise red flags — a search showed that every online reference to the phantom International Scientist Discovery was related to Saurav Singh.

Even more important, while Indian excellence — and its recognition abroad — needs to be duly acknowledged and even celebrated, Indians and their media avoid the broader picture at their peril. No country in the world has developed, no matter how brilliant its scientists and engineers, while a substantial chunk of its population live in abject poverty without basic education and healthcare.