Outsourcing: Vivek Chopra of Computer Sciences Corp. (Part 7)

By guest author Tony Scott

Global Challenges to India’s Dominance in Outsourcing – Is China a Threat?

Tony: I am interested to know your opinion on how this will shake out in the future. You have the perspective of working within both non-Indian and Indian outsourcing companies –what is your take on all this?

Vivek: If I look back five years, eight years, even ten years, people said that China was going to be the next threat to the IT services organizations in India. But still today, in general, the Chinese don’t have the language skills to effectively deliver services in a high-touch, English-speaking environment. They are getting better at English, but if you look at the largest Chinese outsourcing organizations today with 5,000, 8,000, or 10,000 people, they still don’t have the English-language skills.  They are still working on that.

I don’t think they can easily replicate from a services perspective what they have done in manufacturing. But we must wait and see, because China can do wonders. It may come up with something that surprises people, but what these Indian companies are beginning to do – we see this at Infosys – is declare China as the next largest center after India. They have said that from 5,000 people they will grow to 10,000. TCS has done the same.

What the Indian outsourcers are also doing is coming back into the United States and acquiring companies in this country. They are acquiring data centers and competence capabilities. They are going to come into the United States and see if they can reach the same level of success as the IBMs and CSCs that have been here for decades.

From CSC’s perspective, customers in the outsourcing arena are trying to look at making sure they manage their risk of outsourcing work to India.  This is because many of the big outsourcing companies’ Indian operations have grown to 75,000–100,000 people, which is significant. From our perspective, we are saying that CSC still has headroom to grow in India because we have “only” 20,000 people there. We could get to 30,000–35,000 people, but then we will start looking at other centers.

Tony: Where else do you think you would look at new centers in the near future?

Vivek: We recognize that outside China and maybe the Philippines, the talent pool in terms of sheer numbers is somewhat limited. We look at the Philippines more from a BPO or call center perspective because they have an English accent that is easy for most native English speakers to understand.  We’d also look at the Philippines for some back-office work. I haven’t seen any other locale at this time that resembles or even or comes close to the potential of scaling that India provides from a services perspective.

From our perspective, since we have the headroom to grow in India, we are starting to move people from within CSC into the larger India organization. For example, my CFO is Australian. We are getting people from Australia and Singapore to come to India. And we are starting to move people from India. We just moved some people to Vietnam.  Okay, these are still – broadly speaking – Asian countries. But culturally, they are very different. It is not the language and accent alone, it’s the way people operate and the way they do business.

Tony: Absolutely.

Vivek: We are using that as a leverage point, and issued a mandate: In three years’ time we want 50% of CSC’s workflow to be globally dispersed. And now I am creating another mandate.  I am saying that I want diversity. I also want women in my team as we grow, and more important, I want cultural diversity. I want people from the United States, I want people from India going to the United States, I want people from India going to Europe, and I want people from Europe.

We may we do this as a twelve-month, eighteen-month, or twenty-four month exchange program. It will make the organization richer not only as a result of the experience that people who have spent years traveling to Latin America, Europe, and the United States gain, but also because we will have customers who have been to India. I say that’s reason enough for us to do this. I anticipate that from a CSC perspective, this will become a huge plus.

We don’t look first at talent outside: We look at talent within. And we deploy talent within ourselves to make sure we have the best complementary groups of people in the offices and in the regions that are strategically the most important to us moving forward.

I think that most of the India-based companies that beginning to do this, to hire people and attract talent, don’t have the brand to be able to pull it off.  Until five years to seven years ago, I don’t think the bigger names were able to integrate this approach well at all. I think that now they are doing this better. TCS, Wipro, and Infosys are doing it well enough.

This segment is part 7 in the series : Outsourcing: Vivek Chopra of Computer Sciences Corp.
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