Monday, October 29, 2012

Off - Shoring To India - Competive Pressures

About seven years ago, it became obvious to this CEO Blogger that competitive pressures made it necessary for us to Off - Shore various back office accounting functions to India.   We just could not afford to do this type of work in the United States, or Europe any longer.   When I announced our Off - Shoring initiative to our Management Group, though they did not say it to me directly, I am quite certain that they thought I was just plain crazy.   I know that look by now. 

The CEO's job, above all else, is to insure the survival of the company, doing whatever is necessary within legal and ethical bounds to make it happen.   Though I was hardly a trail blazer, I knew it was the right thing to do.   As such, we put a task force together to journey to India to interview the top Off - Shoring companies in India.  At the same time, since none of us had ever been to India, we traveled to Mumbai, Bangalore and New Delhi, all before new airports were built in these cities, which made the trip quite an experience.   Of course, we also did the obligatory 5 hour drive, the longest day of my life, to Agra, the site of the Taj Mahal.   Today, there are new airports in these cities, as well as, a toll road to get to the Taj that cuts the trip to two hours.    

The only way to describe India is to say that traveling there is an assault on all human senses; sight, smell and taste.   And, though most educated Indians speak English, it is not their first language, so it takes a while to become accustomed to Indian accents, which can vary greatly since Indians actually speak many languages, in addition to Hindi, their national language. 

In any case, after doing our due diligence, we chose an Indian Partner for our Off - Shoring engagement that is still in place today.   Since I had read about the cases and reasons for Off - Shoring failure, I made it very clear to impacted managers in our company that if we failed, I would hold them responsible, not our Indians partners.   We were crossing the Rubicon and there would be no turning back.   As such, many of our managers have since traveled to India as part of their jobs. 

We made the decision to Off - Shore these back office accounting functions to India before the Great Recession, which began in 2008 and though technically we are out of Recession, slow or no growth in the last four years has really validated our course of action.  In fact, if we had not moved these functions to India, our profitability would have been severely impacted during these difficult economic times.  

And, those critical of Off - Shoring simply do not understand the workings of Capitalism.   The savings generated from Off - Shoring these back office functions not only allowed us to remain profitable during bad times, we were able to invest more money in front office jobs and technology, around the world, that have been critical to the growth and development of our company.   We are actually bigger and better today because of our Off - Shoring engagement in India. 

Global companies are just that, Global.   We have employees in various countries including India, through our Off - Shore arrangement.  The BRIC countries, Brazil, Russia, India and China represent huge business opportunities and they are not going away any time soon.   Successful companies think globally.   It this inter connected world, what other option is there. 

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