US industry seeks to change views on BPO

Despite the US Senate passing a Bill that bars the outsourcing of government work to countries like India, the industry there is seeking a change in perceptions on the issue.

While addressing the members of the Indo-American Chamber of Commerce (IACC) in New Delhi recently, David Eaton, chief executive officer, Eaton Consulting Group (ECG), said the business case for cross-border outsourcing was compelling because of pressures to optimise costs and boost growth.

Eaton said the trend was likely to continue in the coming years as well.

He said innovative solutions should be sought for resolving cultural differences that crop up in business process outsourcing (BPO), which is a multi-billion dollar industry.

"The term Cross-Border Outsourcing (CBO) more accurately describes outsourcing and insourcing activities across the world," said Eaton.

Quoting a Gartner Dataquest report, he said off shore BPO revenue was growing at 38 per cent and currently 42 per cent of all outsourcing engagements had an offshore component.

By 2004, eight out of 10 chief information officers will be compelled to go offshore and four out of 10 companies had already done that.

Eaton said cultural differences could be leveraged to become an asset and for creating business opportunities.

The viable proposition was not to export Boston to Bangalore. He said immigration of cultures could have a cultural backlash.

"We have to find a synergy in the styles and cultural moorings of the people to avoid wastage of time. That will take care of the potential misunderstandings, differences in risk, hierarchy and context," he said.

Working across cultures is always a difficult task as there are communication barriers, hidden costs, over dependency on the outsourcing provider, language barriers, time zone differences and data security.

"Since culture impacts business process performance and bottomlines, it becomes important to take a closer look at how and why the bottomline is impacted when working across cultures," he said.

According to Eaton, the key areas of cultural differences could be difference in communication style, misunderstanding of project deadline, unexpected delay in software releases and less trust between the partners. These could mean a loss of time, money and credibility for the company, he said.

Managing cross-cultural differences can be difficult but rewarding at the same time. "It gives the employees the all important confidence and the ability to re-engineer the implementation of the process," Eaton said.