Outsourcing Western Business Practice

It seems that not only are we outsourcing our support and IT business functions to India, it now seems that we are also outsourcing our bad business practices too (from news.com.au).

THE head of Indian outsourcing company Satyam Computer Services quit overnight, after disclosing that profits had been falsely inflated for years and sending its shares plunging nearly 80 per cent.

India’s biggest corporate scandal in memory threatens future foreign investment flows into Asia’s third-largest economy and casts a cloud over growth in its once-booming outsourcing sector.

Companies that I work for have outsourced large chunks of their IT development work to Asia in recent years, and the quality of the software being developed is not very good. And this is not the fault of the developers in Asia, it is down to the management and processes. Being away from the business means that the requirements need to be solid, and unfortunately that is not happening.

“It’s going to impact the Indian outsourcing industry. Customers are going to be concerned about offshoring firms in India,” said Sudin Apte, country head of Forrester in the western city of Pune.

They will not have any concerns, the senior managers just want to cut costs – which never get passed on to the clients.

Quality is of no concern as they will have moved on when the problems appear – moved on with their big bonuses and promotions. It is all about short term profit.

And it is the clients who suffer, and when the mess needs to be cleaned up – the clients are the ones who pay through increased costs.



7 Responses

  1. I’ve always found telemarketers working at Indian Call centres to be incredibly helpful.

    Especially Telstra, they are able to resolve technical issues almost immediately, within seconds even. I never get put on hold, or transferred from person to person in the hope that someone, anyone, might be able to help me.

    I’ve never been put ‘on hold’ for hours on end listening to an endless loop of “I am you are, we are Australia…”

    Their English is really good too. They always know how to pronounce my name correctly, and never attempt to “pass the buck” by saying “oh, that’s a hardware problem, I only look after software, you’ll need to speak to someone else, let me just transfer you…”

    “We are one but we are many…..”

    I also like the way that they are very conscious of not calling around the time when I’ve just got back home from work and I’m trying to prepare dinner and unwind and relax.

  2. reb

    Absolutely – it is no the workers that I have issue with…

    But why is my home phone and ADSL still out of action? My internet provider says that Telstra admit that it is their problem. And I have two other friends whose landline are still out of action (since Christmas).

  3. Actually this one is a true story.

    I had to phone Telstra cos my Internet access kept dropping out after every 10-15 minutes.

    The “technician” (and I use that term loosely), told me to uninstall the moedm driver and then reinstall it. I did this as instructed.


    No connection, nothing.

    He then said that it must be a hardware problem and that I’d have to speak to some one else.

    He continued “Thank you for calling Telstra. Is there anything else I can help you with today?”

    Hang on, I said, before I spoke to you, it was working albeit for 10 or 15 minutes at a time, now it doesn’t bloody work at all, and you’re acting as if you’ve resolved the bloody problem for me?

    “Sorry sir, but hardware is not my area. Thank you for calling Telstra. Goodbye”


  4. I called Telstra on Tuesday to upgrade my dial up connection at home to broadband. Spoke to a Corey who put me on hold around 50 times while running around checking things out. After 45mins ( I know because my phone times the calls) he told me he could not help and would put me through to someone else after telling them what I need done. Well I was put through to Mo who was not told any of the details so I had to go through it all again. Once again Mo was continually putting me on hold telling me things were progressing and after a futher 22 mins I was cut off.

    I phoned back and got Ben. I asked to speak to Mo and he said that he has no idea where Mo is or where he works and he will be able ot help. I asked him if anything wa son my file regarding what the other 2 guys were supposidle doing while farting around and putting me on hold.

    Ben advises nothing on my file. I once again explain all details to Ben who says he can do it in 5 mins as I had vented to him the length of my previous call. Whle Ben was helpful the call still took 25 mins and guess what he could not get it set up as something disagrees between the exchange and the house location so a form needed to be sent to some other department to have a simple thing changed and this would take 2 weeks to chnage, and then they should send me my modem out a week after that so if I am lucky I will have broadband in 3 weeks otherwise when I ring there will be nothing on my file and nothing will have been done.

    While Ben was very helpful with things beyond his control the whole experience was distasteful and time consuming for no result at the end. Once again the overwhelming joys of privatisation of our icons and the superior efficiency and service of the company shines through. What a load of shit, this better off under privatisation banner has been flown enough. Re Nationalise the bastard and get back to looking after Aussies instead of shareholders and overseas employees.

    Sorry still venting.

  5. They always know how to pronounce my name correctly

    Because ‘reb’ is soooo difficult :mrgreen:

    I’ve never had a problem with the Indian call centres but have with a malaysian one (HP).

    The telemarketters are well trained though. I was on the ‘no-call register and when they rang trying to sign me up to DoDo (who I was already with at the time), I would tell them I was on the do-not call register and then ask them their name and who they worked for. Instant way to get a hang up from their end. Interestingly, I’m not on the DNCR since swithing to Telstra and I haven’t received any calls either. Does Dodo onsell numbers to telemarketers?

  6. “It seems that not only are we outsourcing our support and IT business functions to India, it now seems that we are also outsourcing our bad business practices too (from news.com.au).”

    Reminiscent of the Enron/Arthur Anderson relationship perhaps?

    “As share values plummeted, PricewaterhouseCoopers, the Satyam auditor, faced intense pressure to explain how it had failed to detect the balance sheet discrepancies.

    “The big issue here is the auditor, which has not done its job,” one Mumbai-based broker said yesterday. “This will call into question all stocks audited by PWC. It will cause them a huge amount of grief.” “

  7. When companies try to manage stock prices instead of their real businesses they tend to get way off track simply because all the personal wealth enrichment benefits flow from manipulating the market into believing they’re world-beaters. Tie executive options and bonuses to the price of shares and the motivation to manipulate information becomes very tempting as the US have found out time and again.

    The Silence of The Funds – John Bogle
    (Managed Earnings and The Happy Conspiracy)

    Today, we live in a world of managed earnings. While it is corporate executives who do the managing, they do so with at least the tacit approval of corporate directors and auditors, and with the enthusiastic endorsement of institutional investors with’ short -term time horizons, even speculators and arbitrageurs, rather than in response to the demands of long-term investors. Like it or not, corporate strategy and financial accounting alike focus on meeting the earnings expectations of “the Street” quarter after quarter. The desideratum is steady annual earnings growth – manage it to at least the 12 percent level, if you can-and at all costs avoid falling short of the earnings expectations at which the corporation has hinted, or whispered, or “ball-parked” before the year began. If all else fails, obscure the real results by merging, taking a big one-time write-off, and relying on pooling-of-interest accounting. All of this creative financial engineering apparently serves to inflate stock prices, to enrich managers, and to deliver to institutional investors what they want.

    But if the stock market is to be. the arbiter of value, it will do its job best, in my judgment, if it sets its valuations based on punctiliously accurate corporate financial reporting and a focus on the long-term prospects of the corporations it values. However, the market’s direction seems quite the opposite. For while the accounting practices of America’s corporations may well be the envy of the world, our nation’s financial environment has become permeated with the concept of managed earnings. The accepted idea is to smooth reported earnings, often by aiding security analysts to establish earnings expectations for the year, and then, each quarter, reporting earnings that “meet expectations,” or, better yet, “exceed expectations.” It is an illusory world that ignores the normal ups and downs of business revenues and expenses, a world in which “negative earnings surprises” are to be avoided at all costs…

    … with huge restructuring changes, creative acquisition accounting;’ “cookie jar” reserves, excessive ‘ immaterial” items, and premature recognition of revenue, earnings management has gone too far. As SEC chairman Arthur Levitt has said, “almost, everyone in the financial community shares responsibility [with corporate management] for fostering this climate.” It is, in a perverse sense, a happy conspiracy. But I believe that no corporation can manage its earnings forever, and that managed earnings misrepresent the inherently cyclical nature of business. Even as we begin to take for granted that fluctuating earnings are steady and ever-growing, we ought to recognise that, somewhere down the road, there lies a day of reckoning that will not be pleasant”

    Speech Delivered Before The New York Society of Security Analysts on October, 1999 – 6 months later on March 24, 2000 the great bull market drew to its inevitable close “

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