Outsourcing Dangerously

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: A new threat seems to be on the horizon for the world’s back office. Eight Indian cities figure in the latest list of the 25 most dangerous offshore outsourcing locations of the world, prepared by Brown Wilson Group known for their Black Book of Outsourcing. NCR (Delhi, Gurgaon, Noida) and Mumbai rank among the 10 least secure cities, with NCR at sixth and Mumbai at ninth position. While Chandigarh is the 15th riskiest city, Pune is on 20th position. Bangalore, Hyderabad and Kolkata are not far behind.

The study also suggests that the realities of an unsafe world have fully overrun into outsourcing decisions. “The risk-reward calculations have irreversibly been changed since the terrorist attacks last year. It will no longer be simply moving to the most cost-effective and efficient location with best skills,” says a recent paper from the group.

Terrrorist threats, coupled with geopolitical and environmental issues seem to be the biggest dangers in Indian cities, according to the Brown Wilson study. In fact, NCR is ranked the riskiest city in terms of ‘transnational and geopolitical issues’ and second riskiest when it comes to ‘terrorist and rebel target threats’. Interestingly, Mumbai ranks highest on ‘terrorist threats’ though the report claims survey was done a month before the terrorist attacks in the city. Bangalore and Chandigarh are at the bottom of the heap on ‘environmental waste and pollution’. In short, Indian cities dominate the list of riskiest places for outsourcing, with the only exception of Bangalore, which has been ranked the second safest after Dublin in Ireland on anti-corruption enforcement.

This survey, which ranks cities not just on their physical security but on other tangible issues like political instability and levels of corruption, has caught many in the Indian outsourcing industry by surprise. It paints a contrasting picture to the results coming from other surveys done till now which have pegged Indian cities as the most popular and favoured outsourcing locations. A KPMG study, for instance, identified Banglore, Mumbai, NCR, Chennai, Pune and Hyderabad as “emerged destinations”and Ahmedabad, Jaipur and Nagpur among emerging cities globally for the IT and BPO industry. Moody’s economists have also affirmed faith in India remaining a top outsourcing destination.