Outsourcing: Interview with Roop Singh, VP and Head for North America, Europe and JAPAC at Wipro Consulting Services (Part 7)

Sramana Mitra: You describe a bit of the insourcing trend in the UK. Is that not happening elsewhere in Europe?

Roop Singh: I recall three to four years ago there was a lot of discussion around the Eastern European countries, whether it is Romania or Poland, for example. A lot of companies in Germany specifically used those locations because of the language and low cost capabilities. What we find is that the Eastern Block’s society became more transient, in the sense that they got a license to travel through the European Community, the attrition factor became very high in those locations. Somebody who can easily move to the UK or Germany, rather than working in Poland for £1,000 or £2,000 a month, would rather earn double that money living in Germany or the UK. That caused some concern for companies that were using near shore facilities, especially in the Eastern European market.

The second thing we found is that as countries started feeling the unemployment pressure because of the crisis went through, the garment itself has given a lot of benefits to open up near shore centers in underdeveloped markets. If you want to set up a call center today in the north of England, they give you incentives to actually set that up. You get tax brakes or incentives to set up a center there. Those are benefits that caused some organizations to start looking at insourcing themselves and they are also getting the social benefit of it.

SM: What about Southern Europe? The youth unemployment rates there are crazy: 60% in Greece, 50% in Spain, 40% in Portugal and Italy, etc. Do you have insights into those geographies?

RS: I think given the continuing crisis you see in those markets, very few companies are willing to invest in those markets. While they are willing to take the talent available in those markets, it is very hard to set up a center in Spain, for example. The outcome is still not known in terms of what the next step the government is going to take. The same situation is happening in Greece and Cyprus. You can use contractors and staff from those regions, but a lot of service organizations that have centers there are actually more cautious about setting up new centers in those environments. So we are waiting to see how the economy stabilizes.

SM: Do you apply the same logic to France?

RS: France is much more stable.

SM: Do you have an operation in France?

RS: We do.

SM: How big is it?

RS: We have about 400 to 500 people working in France today.

SM: That is all?

RS: It is a decent sized operation with just over about $150,000,000 in France. Our workforce is very local there, because you need that for the French market.

SM: It is interesting what you are saying about the numbers. I spoke with the PCF head in Latin America, and he gave me a number. By 2015 his target for all of Latin America, including not only servicing the Latin American original market, but also the near shoring strategy to cater to the U.S. market, he predicts a target of nearly 25,000 hires. If you look at that number, that is going to make a huge impact.

RS: Our numbers are not anywhere near 25,000. Our strategy in that market is  for in the country services to clients, which we started doing very effectively. We also like to build talent there that we can use in the U.S. We have an operation out there but we haven’t scaled it up to a size that we can talk about at this point.

SM: That is very interesting. It was nice talking to you.

RS: Thank you very much, Sramana.

This segment is part 7 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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