International Business Opportunities

Indian NASSCOM and Dutch CBI have jointly announced an agreement which would make available to European small and medium-sized enterprises (SMEs) the benefits of business process outsourcing to highly specialised companies in India (BPO).

BPO, covers activities such as call centres, finance and administration, data processing, research, back office processes, human resource management and many others.
As many SMEs are not able to take advantage of BPO, the agreement aims to help them formulate exactly what their outsourcing demand is and to help them locate a perfectly matching partner in India.

CBI - an agency of the Dutch ministry of Foreign Affairs, leading centre of expertise in Europe in the area of trade with developing countries, will help European SMEs recognise the huge advantages of business process outsourcing. It will also assist them in finding reliable partners who understand their needs in India and other outsourcing destinations.

NASSCOM - National Association of Software and Service Companies, the largest and most important trade body for the Indian IT and (more…)

A few weeks ago we have reported the result of a survey conducted by Capgemini about outsourcing trends in Europe.
The study showed that British and Irish companies outsourced 8 percent of IT operations to offshore partners, as the European average was of only 2 percent. A difference expected to increase by 2008, with the British figure reaching 24 percent, compared to a European average of 5 percent.

Social and cultural issues, were reported as cause of such difference.
What is now happening in France, with the protests across the country caused by a Government measure proposed to decrease the jobless rate, seems to confirm how to be hard bringing changes in such societies.

Newsweek, in “Leaders Only Know How to Say No“- April 3 issue, calls this European attitude as “politics of protest about resisting change”.
It continues:

“It seeks to uphold the status quo. And for Europe as a whole, that is a disaster.”

Going a step forward: “At bottom, Europeans from the founding states have lost the ability to say Oui or Sí to change, reform and modernization. Chirac says Non to opening up Europe’s services industry to greater competition, even though France is Europe’s biggest exporter of services.”

It concludes: “Both countries -France and Italy- need a revolution. But it will not come from students who protest against change, labor leaders who deny modernity—and politicians who only know how to say Non.”

The predictions of slow offshore ousourcing growth for European companies are also based on such scenario.

Growing IT services demands from USA and Europe along with shortage of skilled employees, are forcing Indian IT firms to look for outsourcing to China.

“Reoutsourcing” to China, seems a new strategy for leading Indian IT companies, which also try a way to face increasing salaries of high cost workers.
In China, on an average IT-engineer with little bit of experience can be paid 500$ salary per month as compared to over $700 in India.

However, what can be outsourced to China is related to Information Technology services, not BPO segment which requires knowledge of English language.
Poor English skills of its employees, limit China also to become a potential competitor of India in the offshore outsourcing market.

India has currently about 80 % of IT services being outsourced offshore, as reported from Gartner Group,research company. ( source )

A study by KPMG found that Singapore is the cheapest country, among the major industrialised nations, to run a business.
The bi-annual study is based on the costs of setting up and running businesses across different industries over a 10-year cycle.

The research - which covers 128 cities in nine countries, takes into account key factors such as wages, business taxes, rent, and energy costs.

Average wages lower in Singapore than in the other nations included in the study, pushed the Asian country at the top of this cost-competitiveness league, as labour costs are the most important factor for businesses when deciding where to locate their operations, the KPMG report explained.

Below the cost-competitiveness league (Source: KPMG-2006)
1- Singapore
2- Canada
3- France
4- Netherlands
5- Italy
6- United Kingdom
7- United States
8- Japan
9- Germany

In times where most of companies go offshore to cut costs, whether moving manufacturing plants or outsourcing to low salary countries, new fashion trends lead to new strategies in the apparel industry.

The concept that is going to have major implications for the supply chain of American retailers and on the manufacturing of apparel, as reported in the Newsweek article: A New Fashion Frontier - March 20 issue, is Fast Fashion.

Fast Fashion, for retailers means avoiding overstock and clearance sales, by introducing new items much faster than the norm, for shoppers means checking out the latest items weekly or even daily, rather than monthly. This typically European trend is now spreading out among the American consumers.

Top European retailers, such as H&M and Zara are moving rapidly into the U.S. market, as big American players, too big to copy the fast-fashion model from the ground up, are borrowing elements of it, moving from a seasonal cycle to something much faster.

Even though fast fashion remains a niche—it represented a little more than 1 percent of American market of apparel, H&M says the United States will be its fastest-growing market.

That could leads to shifting production for the U.S. retail market from China to less distant sites, like Mexico, in order to (more…)