Briefs

Oct 13, 2003. News.com

... providers of business process outsourcing (BPO) services move beyond call centers and routine data-crunching tasks toward higher-end services. Among this emerging group of BPO firms is Evalueserve, which has its headquarters in Bermuda and keeps its main operational center in Gurgaon, some 10 miles outside New Delhi, India's capital. It also has a U.S. subsidiary based in New York and a marketing office in Austria to cover the European market.

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Experts say these new trends are significant, and they will continue to grow over time. "Activities considered for 'offshoring' have moved up in value and begun to touch core functions, such as highly analytical processes," says Stefan Spohr, a principal in the financial institutions group of A.T. Kearney, a global management consulting firm in Chicago. "More complex customer services are substituting simple data processing and call center activities." Spohr adds that the higher-end functions being performed offshore these days include information research, financial portfolio analysis, customer data mining, statutory reporting and inbound insurance sales, among others.

... a top-notch engineering graduate with an MBA would start out in India at between $14,000 and $22,000 a year, while a U.S. student graduating from a top management school would earn about $90,000 to $100,000 a year. The wage cost in India, Aggarwal points out, is just about a fifth or sixth of U.S. levels.

On most other fronts, though, costs are comparable between the two countries, says Aggarwal. The cost of real estate in Silicon Valley is almost the same as what his firm pays in Gurgaon. In Mumbai real estate is even more expensive. What's more, he doesn't see any appreciable difference in telecommunications costs in India and the United States. Costs of electricity, hardware and the like, are also high in India. "Salaries represent only 50 percent of the total costs," says Aggarwal. "When you add the other expenses, Indian operations would cost about a third of what they would in the U.S."

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