Outsourcing: Interview with Roop Singh, VP and Head for North America, Europe and JAPAC at Wipro Consulting Services (Part 4)

Sramana Mitra: There are also time zone advantages, communication advantages, and a bunch of other advantages in near shoring that are now well known.

Roop Singh: And you are actually recruiting from the region, so the need to move is less. We are finding those as advantages that we get with our customers. The result is that we as an organization need to change. In the past, a typical client engagement manager just sold an outsourcing strategy. An organization now really needs to think through other locations. What is the procurement for becoming a lobbyist nowadays? Immigration pressures, financial pressures or intra-regional pressures are also other factors to be considered. Organizations that understand that and capture the nuance of what is happening will be successful. Others will lose very quickly.

SM: What is your comment about the immigration policy that your industry is going to have to deal with in terms of recruitment?

RS: It is the same in North America and Europe. That has become much faster given the economic crisis we went through. Most people who are established are using that as a mechanism to keep the in-country people happy. But it had a direct impact on companies such as ours. From our perspective, recruiting locally is bringing many more advantages. We have also seen the new immigration policy and its implications on the cost for the individual locally. [The government] put a certain threshold on salary that you have to pay to a person you want to bring from India, for example. It becomes much more cost effective to recruit the person locally.

SM: Especially if you can take community college students from the local community and train them. I imagine their salaries are very low, right?

RS: If you put all the training you provide and the time they spend in India to come up to speed, the cost is not really a factor. It is similar. The fact is what you are doing now is taking individuals from the region, which is one way of ensuring you are meeting the price that has been set at this point.

SM: My personal bias is towards doing a more distributed set of centers so that people have the draw of being close to their families. The American labor force is moved around very easily, and nowadays people in India also move around very freely. I think there is an interest of being not too far from family and if your job provides that advantage, it is an attraction, not a deterrent.

RS: I could not agree more. I think we are finding that attracting talent becomes much easier when you live in that region, whether it is a one-hour or even a three-hour commute.

SM: In terms of types of projects, what has changed?

RS: In the change we have seen in the last three to four years, organizations are no longer happy to give you those large scale $100 million-plus opportunities. We are now looking for quick returns, visible outcomes, and for gain. They are saying, “If you want to work with us, work with us as a partner and let’s see the outcome jointly, and be successful jointly.” That is where we have seen a major shift, especially in the large-scale projects we have been used to. They want us to have ownership in those projects. Normally the $10 million to $15 million type projects work as before, but the large-scale projects are where we need to work with them as partners and take ownership of the outcome.

SM: What percentage of the gains are they willing to share with you?

RS: If you are saying that the entire project will be x for you, they want us to take anywhere between 15% and 30% risk with them. You will get the bulk of your share once you delivered the project successfully. There have also been other instances where we have worked with other organizations, and we got paid when the project successfully launched. Every transaction that happened on the product, we got paid for.

This segment is part 4 in the series : Outsourcing: Interview with Roop Singh, VP and Head for North America, Europe and JAPAC at Wipro Consulting Services
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