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IMRC 2006 Final

This document provides information about an upcoming conference on global competitiveness through outsourcing, including its objectives, structure, and featured speakers. The conference will bring together practitioners and academics to share knowledge on outsourcing in manufacturing and services. It will include 9 academic sessions presenting research papers on outsourcing, as well as special sessions with industry leaders from companies like Deutsche Bank, Wipro, and Cognizant discussing their outsourcing strategies and practices. The goal is to identify best practices and research in how firms can leverage outsourcing to gain competitive advantage globally.

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Gl bal Competitiveness through Outsourcing: Implications for Services & Manufacturing July 13 – 15, 2006 l IIM Bangalore Sponsors PLATINUM GOLD SILVER
ABOUT THE CONFERENCE Outsourcinginboththemanufacturingandtheservicesectorshashadalonghistory.What ismorerecent,however,istheglobalisationofoutsourcing.Awiderangeofactivitiesin manufacturingandservicesisbecomingincreasinglytradableduetotechnology,theopening upofforeigndirectinvestments(FDI)andnewkindsoforganisationalarrangements.Further catalysingthisprocessaretherecentadvancesintheICTsector.Thesedevelopmentshave collectivelyresultedintheuseofoutsourcingasanimportantelementofcorporatestrategy inredefiningglobalcompetitiveness.Theyofferimmensepotentialforfirmstocreatenew value.TheemergenceofnewermarketsinrapidlydevelopingcountriessuchasIndiaand China have enabled policy makers and firms to deploy these new mechanisms. Clearly,thisissuemeritsthegreaterattentionofbothresearchersandpractitioners.The IMRConferenceseekstofulfilthisneedbybringingtogether‘best-inclass’practitioners, educators and researchers in the field of management to share their knowledge on this importanttheme. Objectives l To provide a forum for management professionals and academics to meet and share theirknowledge l To identify and promote excellent research and writing talent among management academicsandpractitioners l To enable a large pool of management practitioners and educators to be informed by andbenefitfromkeyresearchfindingsinthefieldofmanagement UniqueFeaturesoftheConference Theuniquenessoftheproposedconferenceliesinthemannerinwhichpapersareselected forpresentation.TheunderlyingphilosophyoftheIMRConferenceistocarefullyselecta limitednumberofgoodqualityresearchpapersandprovidesufficienttimeforthespeakers’ presentationsandforaudienceinteraction.Therefore,paperpresentationintheconference ismainlybyinvitation.Whileauthorsmakepresentationsoftheirworkattheconference, delegates take part in the entire proceedings and have the opportunity to discuss the researchfindingswiththeauthorsandotherparticipants. StructureofSessionsintheConference Theconferenceseekstobalancetheperspectivesofbothpractitionersandresearcherson thethemeofOutsourcing. l There are 9 academic sessions in the conference that facilitate sharing of research issuesinOutsourcing.Duringthesesessions,37papersthatbringmulti-dimensional researchperspectivesontheconferencethemewillbepresented. IMR Conference 2006 1
l Tocomplementtheacademicsessions,therearespecialsessionsorganisedtobringin practitionerperspectivestotheconferencethemes.Theseinclude: w Inauguration by Shri N. S. Raghavan, Co-founder, Infosys Technologies and Nadathur Investments and Holdings. w CEO Symposium on ‘Beyond Cost Arbitrage: Emerging Paradigms for Sustaining Competitive Advantage in Outsourcing’, the participants being, Mr. Arindam Banerrji, MD & COO, Deutsche Bank Operations International, Mr. Amitabh Chaudhry, Managing Director & CEO, Progeon, Mr. T. K. Kurien, CEO, Wipro BPO, Mr.C.S.Murali,VPCorporateInitiatives,CognizantTechnologySolutions,and Mr.PeterSchumacher,Founder,President&CEO,ValueLeadershipGroup. w Plenary Sessions by Mr. Vikram D Rao, President, Madura Garments and Mr. Joe Sigelman,Co-President,OfficeTiger w PanelDiscussionon‘GlobalCompetitivenessthroughOutsourcing’,thepanellists being, Mr. Ravan Boddu, CEO iSoft India, Mr. Anil Kumar Chowdhary, COO, First Indian Corporation, Mr. Gopal Krishnan, CEO, Ninestars and Mr. Sanjoy Roy Choudhury,AssistantVicePresident,Evalueserve. ABOUT THE CONFERENCE 2 IMR Conference 2006
ProgeonLtd. 26/3,26/4and26/6,ElectronicsCity Hosur Road, Bangalore - 560 100, India Tel : +91 80 2852 2405 Fax : +91 80 2852 2411 Url : www.progeon.com Wipro BPO Corporateoffice WiproTechnologies,DoddakannelliSarjapurRoad Bangalore - 560 035 Tel : +91 80 28440011 Fax : +91 80 28440256 Url : www.wipro.com Value Leadership Group Headquarters 107GrandStreet,6thFloor New York, NY 10013, USA Tel : +1 (917) 825 4007 Fax : +1 (212) 941 0442 Url :www.value-leadership.com IndianOffice PaharpurBusinessCentre NehruPlaceGreens New Delhi - 110 019, India Tel : +91 11 2620 7433 Fax : +91 11 2620 7606, 2620 7575 Cognizant Technology Solutions World Headquarters 500 Glenpointe Centre West Teaneck, NJ 07666 Tel : 201-801-0233 Fax : 201-801-0243 TollFree:1-888-937-3277 Url : www.cognizant.com Chennai 226 Cathedral Road Chennai-600086,India Tel : +91 44 28113063, 28116033 Fax : +91 44 28112622, 28112507 OfficeTiger An RR Donnelley Company 6thFl,SpencerPlaza,PhaseII 769 Anna Salai, Chennai - 600 002 Tel : +91 44 2849 8050 Fax : +91 44 2849 8053 Url :www.officetiger.com Ninestars Information Technologies Ltd. Corporate Office: Bangalore #37,KasturbaRoadCross,OffLavelleRoad, Bangalore-560001,Karnataka,India Tel : +91 80 22123881 / 2; 41121123 / 46 Fax : +91 80 22123881 / 2 E-mail:corporate@ninestar.co.in Url :www.ninestar.co.in IMR Conference 2006 3 Indian Institute of Management Bangalore Bannerghatta Road, Bangalore - 560 076, India Tel : +91 80 2658 2450 Fax : +91 80 2658 4050 Url :www.iimb.ernet.in SPONSORS
CONFERENCE ADMINISTRATION 1. ProfessorPGApte,Director,IIMB(Chair) 2. ProfessorMukulAsher,NationalUniversityofSingapore 3. ProfessorJagadishBhagwati,ColumbiaUniversity 4. Mr. Pramod Bhasin, Genpact 5. Mr.KiranKarnik,Nasscom 6. Mr.PeterSchumacher,ValueLeadershipGroup 7. ProfessorRajanVaradarajan,TexasA&MUniversity 8. ProfessorGuyFitzgerald,BrunelUniversity 9. ProfessorLeslieWillcocks,UniversityofMelbourne 10.ProfessorRobertKennedy,UniversityofMichigan Advisory Committee 1. ProfessorRupaChanda,IIMB(Chair) 2. ProfessorAbhoyOjha,IIMB(Co-chair) 3. ProfessorB.Mahadevan,IIMB 4. ProfessorVVenugopal,NyenrodeBusinessSchool,TheNetherlands 5. Mr.SrikantKolhar,ResearchScholar,IIMB 6. Mr.AshutoshKumarSinha,ResearchScholar,IIMB 7. Ms.HariniSrinivasan,IIMB 8. Ms. K R Usha, IIMB Organising Committee 1. ProfessorB.Mahadevan,IIMB(Chair) 2. ProfessorRupaChanda,IIMB(Co-chair) 3. ProfessorSouravMukherjee,IIMB 4. ProfessorAbhoyOjha,IIMB 5. Dr.VPKochikar,Infosys 6. ProfessorYLRMoorthy,IIMB 7. ProfessorMuraliPatibandla,IIMB 8. Mr.SrikantKolhar,ResearchScholar,IIMB 9. Mr.SrinivasGunta,ResearchScholar,IIMB 10.Mr.SunilKumarSingh,ResearchScholar,IIMB 11.Ms. K R Usha, IIMB Academic Affairs Committee 4 IMR Conference 2006
CONFERENCE ADMINISTRATION 1. Ms.KRUsha,IIMB(Chair) 2. Ms.HariniSrinivasan,IIMB(Co-chair) 3. Mr.SrikantKolhar,ResearchScholar,IIMB 4. Mr.MVMahesh,ResearchScholar,IIMB 5. Mr.AshutoshKumarSinha,ResearchScholar,IIMB 6. ProfessorB.Mahadevan,IIMB 7. ProfessorRupaChanda,IIMB 8. ProfessorGopalNaik,IIMB 9. Ms.GShashikala,IIMB 10.Ms.PriyaVivek,IIMB Conference Logistics Committee IMR Conference 2006 5
Mr. Arindam Banerrji Mr.ArindamBanerrjiisChiefOperatingOfficer,DeutscheBankOperationsInternationalin BangaloreandMumbai.Priortothis,hewasDB’sRegionalCIOforIndia,responsibleforthe IndiaSmartsourcingInitiativeandtheGTOfunctions.ACharteredAccountant,hebeganhis careerintheShippingDivisionofLarsen&Toubro.HespentseveralyearswithJPMorgan invariouscapacitiesinFinance,TechnologyandOperations,andwasresponsibleforsetting uptheGlobalServiceCentreofJPMC. Mr. Ravan Boddu Mr. Ravan Boddu is CEO, iSOFT India, iSOFT being the largest healthcare IT company in Europe. He has a BE from REC, Allahabad, and an MTech in Computer Science from Osmania University,Hyderabad.Startinghiscareerin1987withUshaComputersinDelhi,heworked with KPMG in the UK, and WorldCom, Dell and HomeGrocer.com in the US before returning toIndiatosetupiSOFT’soperations. Mr. Amitabh Chaudhry Mr.AmitabhChaudhryisManagingDirector&CEOofProgeon,theBPOsubsidiaryofInfosys Technologies.Priortothis,hewasheadoftheinvestmentbankingfranchiseforSouthEast AsiaandstructuredthefinancepracticeforAsiaatCreditLyonnaisSecuritiesinSingapore.He holdsabachelor’sdegreeinengineeringfromtheBirlaInstituteofTechnology&Science, Pilani,andanMBAfromtheIndianInstituteofManagement,Ahmedabad. Mr. Anoop Hegde Mr.AnoopHegdeisCountryManager,FirstIndianCorporation,whichsupportstheoperational efficiencyandoffshoreinitiativeoftheFirstAmericanCorporationandoffersspecialised servicesinsoftwaredevelopment,testingandmaintenanceaswellastheITESspace.Prior to joining FIC in 2002, he was General Manager, VeriFone India. He has also worked in variouscapacitiesatWipro. HehasaBComfromSt.AloysiusCollege,Mangalore,andisa FellowoftheInstituteofCharteredAccountantsofIndia. Mr. Gopal Krishnan Mr.GopalKrishnan,isFounder,ChairmanandManagingDirectorofNinestarsInformation TechnologiesLimited,adigitisationcompanyprovidingstate-of-the-artarchivalsolutions todeliverdigitisedcontenttointernationallyrecognisedTier1newspapers.HeholdsaBSc fromLoyolaCollege,ChennaiandanMAinHumanResourcesfromtheUniversityofChennai. Hewasaparticipantinthe‘DrivingStrategicInnovation’programmeintheIMD/MITSloan SchoolofExecutiveEducation. Mr. T K Kurien Mr. T K Kurien is CEO of Wipro BPO which provides a broad range of services from CRM to industry-specificsolutions.HewaspartoftheWiproBPObusinessdrivingthetransaction processingbusinessinitiative.HewasearliertheCFOofWiproGEMedicalSystemsandCEO ofGEXRay. BIOGRAPHICAL SKETCH OF CHIEF GUESTS, PLENARY SPEAKERS AND PANELLISTS 6 IMR Conference 2006
Mr.CSMurali Mr.CSMuraliisVicePresident,CorporateInitiatives,atCognizantTechnologySolutions, wherehedrivescorporateinitiativesinmarketingandorganisationaldevelopment.Priorto joiningCognizant,hewasapartneratConnectCapital,aventurecapitalfirmfocusedon softwareandBPOsectors.Asanindependentconsultant,hehasadvisedlargeUScorporations onITandBPOoutsourcingstrategies.HestartedhiscareeratTCSwherehespent15years invarioustechnical,salesandmanagementpositions. Mr. Nadathur S Raghavan Mr.NadathurSRaghavan,entrepreneurandphilanthropist,waspartofthefoundingteam ofInfosysTechnologiesandhasworkedinvariouscapacitiesinhis19yearsatInfosys.He retiredasJointMDin2000topursuehisvisionofpromotingentrepreneurshipandIndia- based global companies. To this end he co-founded Nadathur Holdings & Investments and helpedsetuptheNSRaghavanCentreforEntrepreneurialLearning(NSRCEL)atIIMBangalore. Inaddition,heactivelycontributestoactivitiesthataresociallyinclinedandholdsnon- executivepositionsinvariousorganisations. Mr. Vikram D Rao Mr.VikramDRaobeganhiscareerasaManagementTraineeinMaduraCoats.Hejoinedthe AVBirlaGroupin1999inhiscurrentpositionasGroupExecutivePresidentofFabricsand ApparelBusiness,GrasimIndustriesLimited,reportingtotheChairmanofAVBGroup.He wasawardedtheSuperAchieverAwardbytheIndiraGroupofInstitutes,PuneinOctober 2003. Mr. Sanjoy Roy Choudhury Mr.SanjoyRoyChoudhuryisanAssistantVicePresidentatEvalueserve,aglobalresearch servicesorganisationthatprovidesbusiness,marketandinvestmentresearch,dataanalytics andintellectualpropertyservicestoclientsaroundtheworld.Heiscurrentlymanagingthe operationsofthecompanyintheareaofinvestmentresearch.Heisactivelyinvolvedin campusrecruitmentaswellasnewinitiativesintheknowledgeprocessoutsourcingindustry. Mr. Peter Schumacher Mr. Peter Schumacher is Founder, President & CEO of the Value Leadership Group, an independentmanagementconsultingfirm.WithofficesintheUSA,Europe,andIndia,the ValueLeadershipGroupdevelopsglobalisationstrategiesforlargecompanies.Heholdsan MBAfromtheLeonardN.SternSchoolofBusinessatNewYorkUniversity. Mr. Joe Sigelman Mr.JoeSigelmanisCo-President,OfficeTiger.Priortoco-foundingOfficeTiger,heworked withGoldmanSachsInternationalinLondonintheInvestmentBankingDivisionfocusing onrealestate,serviceandhealthcareinvestmentsthroughoutEurope.AgraduateofPrinceton University’sWoodrowWilsonSchoolofPublicandInternationalAffairsandtheHarvard Business School, he began his career with Lazard Frères, New York. He is a recipient of BusinessWeek’sannualStarofAsiaAwards,2006. BIOGRAPHICAL SKETCH OF CHIEF GUESTS, PLENARY SPEAKERS AND PANELISTS IMR Conference 2006 7
09:00-12:00 ArrivalofParticipants 12:00-14:00 ConferenceRegistration 14:00-16:30 CURTAIN RAISER TO THE CONFERENCE – CEO SYMPOSIUM Beyond Cost Arbitrage: Emerging Paradigms for Sustaining Competitive Advantage in Outsourcing Mr.ArindamBanerrji,MD&COO,DeutscheBankOperationsInternational Mr.AmitabhChaudhry,ManagingDirector&CEO,ProgeonLtd. Mr.T.K.Kurien,CEO,WiproBPO Mr.C.S.Murali,VP,CorporateInitiatives,CognizantTechnologySolutions Mr.PeterSchumacher,Founder,President&CEO,ValueLeadershipGroup 17:00-19:00 ConferenceInauguration Shri Nadathur S Raghavan, Co-founder, Infosys Technologies and Nadathur Investments and Holdings 19:30-21:00 InauguralDinner 09:00-10:30 ParallelSessionA1 IS OUTSOURCING HERE TO STAY? SOME PERSPECTIVES 09:00-10:30 Parallel SessionA2 OPPORTUNITIES IN KNOWLEDGE-INTENSIVE DOMAINS 10:30-11:00 CoffeeBreak 11:00-13:00 ParallelSessionB1 SMEs AND OUTSOURCING 11:00-13:00 ParallelSessionB2 CHALLENGES IN OUTSOURCING 13:00-14:00 LunchBreak 14:00-16:00 ParallelSessionC1 TRADE AND INVESTMENT ISSUES 14:00-16:00 ParallelSessionC2 NICHE AVENUES FOR OUTSOURCING Thursday, July 13, 2006 DAY1 Friday,July14,2006 DAY2 SCHEDULE 8 IMR Conference 2006
11:00-13:00 ParallelSessionC3 COMPARATIVE ASPECTS OF OUTSOURCING 16:00-16:30 CoffeeBreak 16:30-18:00 PlenarySession-1 Mr. Vikram Rao, Pesident, Madura Garments 19:00-22:00 CulturalProgrammebyPuthaliKalarangafollowedby ConferenceDinner 09:00-10:30 PlenarySession-2 Mr.JoeSigelman,Co-President,OfficeTiger 10:30-11:00 CoffeeBreak 11:00-13:00 ParallelSessionD1 IMPLICATIONS OF OUTSOURCING 11:00-13:00 ParallelSessionD2 ISSUES FROM SERVICE-PROVIDER INDUSTRIES 13:00-14:00 LunchBreak 14:00-15:30 PanelDiscussion: GLOBAL COMPETITIVENESS THROUGH OUTSOURCING Mr.RavanBoddu,CEO,iSoftIndia Mr.AnoopHegde,CountryManager,FirstIndianCorporation Mr. Gopal Krishnan, Founder, Chairman and Managing Director,NinestarsInformationTechnologiesLimited Mr.SanjoyRoyChoudhary,AssistantVicePresident, Evalueserve Note:Thefour parallelsessionsforpaperpresentationaredenotedasA, B,C&D inthetable SCHEDULE Saturday, July 15, 2006 DAY3 IMR Conference 2006 9
09:00-12:00 ArrivalofParticipants 12:00-14:00 ConferenceRegistration 14:00-16:30 CURTAIN RAISER TO THE CONFERENCE–CEO SYMPOSIUM Beyond Cost Arbitrage: Emerging Paradigms for Sustaining Competitive Advantage in Outsourcing Mr.ArindamBanerrji,MD&COO,DeutscheBankOperationsInternational Mr.AmitabhChaudhry,ManagingDirector&CEO,ProgeonLtd. Mr.T.K.Kurien,CEO,WiproBPO Mr.C.S.Murali,VP,CorporateInitiatives,CognizantTechnologySolutions Mr.PeterSchumacher,Founder,President&CEO,ValueLeadershipGroup 17:00-19:00 ConferenceInauguration ShriNadathurSRaghavan,Co-founder,InfosysTechnologies and Nadathur Investments and Holdings 19:30-21:00 InauguralDinner 09:00-10:30 ParallelSessionA1 IS OUTSOURCING HERE TO STAY? SOME PERSPECTIVES Thursday, December 16, 2004 DETAILED SCHEDULE Thursday, July 13, 2006 Friday,July14,2006 1.RajanVaradarajan,Texas A & M University, USA 2. Rupa Chanda, Indian InstituteofManagement Bangalore 3. Ananda Mukherji and Jyotsna Mukherji, Texas A & M InternationalUniversity,USA ComparativeAdvantage,Competitive Advantage,CompetitiveImperative andGlobalOutsourcing GlobalOutsourcingofServicesand DevelopmentinDeliveryCountries OutsourcingasaSelf-Correcting Phenomenon: A Gaia Hypothesis Perspective 10 IMR Conference 2006
DETAILED SCHEDULE 09:00-10:30 ParallelSessionA2 OPPORTUNITIES IN KNOWLEDGE-INTENSIVE DOMAINS 1. Jason M Pattit1 , S.P. Raj2 and David Wilemon1 , Snyder Centre for Innovation Management1 ; CornellUniversity2 2. K.Momaya,IndianInstituteof Technology,Delhi 3. K. Manasa and Kailash B L Srivastava,WiproTechnologies, Bangalore;IndianInstituteof Technology,Kharagpur OutsourcingR&D:TheNextFrontier R&D / Knowledge Process Outsourcing from Japan: An UnexploredCompetitiveness Opportunity? BusinessProcessOutsourcing: Knowledge Management as a CompetitiveStrategy 10:30-11:00 CoffeeBreak 11:00-13:00 ParallelSessionB1 SMES AND OUTSOURCING 1. Pradeep Mukherjee1 , Abhijit Chaudhary2 and Nishant Verma1 Tholons,Bangalore1 ;Bryant University,RhodeIsland2 2. Shameen Prashantham and Naveen Marimuthu, University ofStrathclyde,UnitedKingdom; MindtreeConsulting,Bangalore 3. U. Srinivas Rangan and Peter Schumacher, Babson College, USA;ValueLeadershipGroup 4. Jogendra Nayak, Gautham Sinha and Kalyan K Guin, IndianInstituteofTechnology, Kharagpur BPO Adoption by Small and Medium Enterprises:AnInnovation-based Approach ShiftsinKnowledge-Intensityand SMEInternationalisation:Diversifying fromSoftwareServicestoProducts EntrepreneurialGlobalisation:Lessons fromtheExperiencesofEuropean SmallandMediumEnterprises ThePerceivedImpactofOutsourcing on Small and Medium Industries IMR Conference 2006 11
DETAILED SCHEDULE Friday,July14,2006 1. Sandhya Shekhar and L.S. Ganesh,IndianInstituteof Technology,Madras 2. SrinivasAinavolu,Indian InstituteofManagement, Calcutta 3.SuveeraGill,University BusinessSchool,Panjab University 4. B.R. Bhardwaj1 , Sushil2 and K. Momaya2 , Bharati Vidyapeeth Institute of Management and Research1 ;IndianInstituteof Technology,Delhi2 Benchmarking Knowledge Gaps for AssessingOutsourcingViability LeveragingOutsourcing–Performance ofandImplicationsforIndianIT ServicesIndustry OutsourcingandTransferPricing Challenges CorporateEntrepreneurshipModel:A SourceofGlobalCompetitiveness 11:00-13:00 ParallelSessionB2 CHALLENGES IN OUTSOURCING 13:00-14:00 LunchBreak 14:00-16:00 ParallelSessionC1 TRADE AND INVESTMENT ISSUES 1. Arpita Mukherjee and Paramita Deb Gupta, Indian CouncilforResearchon InternationalEconomicRelations 2.T.J.Joseph,ICFAIInstitute for Management Teachers (IIMT) 3. Peter D Ørberg Jensen, Copenhagen Business School, Denmark IndoUSFTA:ProspectsforIT-Enabled /BPOServices SpilloversfromForeignDirect InvestmentandAbsorptiveCapacity ofFirms:EvidencefromIndian ManufacturingIndustryafter Liberalisation Offshoring in Europe — Evidence of a Two-way Street From Denmark 12 IMR Conference 2006
DETAILED SCHEDULE 14:00-16:00 ParallelSessionC2 NICHE AVENUES FOR OUTSOURCING 1. Priyan R Naik, Larson and ToubroLimited 2. Sanjay Choudhari1 , Venkata Reddy Muppani2 , Arunabh Prasad Gupta2 and Ashutosh Garg2 ,NationalInstituteof Construction Management and Research, Pune1 ; IIT, Bombay2 3. Bala Krishnamoorthy and Varun Nagalia, Narsee Monjee InstituteofManagementStudies, Mumbai 4. D.K. Agrawal and Sangeetha Chhabra,ForeSchoolof Management, New Delhi; Lal BahadurShastriInstituteof Management Dealership-ASingularRouteto Outsourcing Building Competencies through Maintenance Outsourcing: ACase Study of an Indian Glass Company CompetitiveStrategiesfor OutsourcinginHealthcareIndustry Outsourcing3PLServices:A Measurement of Indian Corporate Mindset 14:00-16:00 ParallelSessionC3 COMPARATIVE ASPECTS OF OUTSOURCING 1. Naresh K Malhotra1 , James Agarwal2 , Francis M. Ulgado1 and G Shainesh3 , Collegeof Management,GeorgiaInstituteof Technology1 ;Universityof Calgary,Canada2 ;IndianInstitute of Management Bangalore3 DifferencesinServiceQualitybetween DevelopedandDevelopingCountries: How Developing Countries Can ImprovetheirCompetitivenessinthe OutsourcingofServices 4. Sadhana Srivastava and RahulSen,National UniversityofSingapore; InstituteofSoutheastAsian Studies,Singapore Production Fragmentaion and Outsourcing:ImplicationsforIndia’s GlobalTradeIntegration IMR Conference 2006 13
DETAILED SCHEDULE Friday,July14,2006 16:30-18:00 PlenarySession-1 Mr. Vikram Rao, President, Madura Garments 19:00-22:00 CulturalProgrammebyPuthaliKalarangafollowedbyConference Dinner 09:00-10:30 PlenarySession-2 Mr.JoeSigelman,Co-President,OfficeTiger 10:30-11:00 CoffeeBreak 11:00-13:00 ParallelSessionD1 IMPLICATIONS OF OUTSOURCING Saturday, July 15, 2006 2. Van V. Miller and Ananda Mukherji, HumanandEcological Resources,LosOjos;TexasA&M InternationalUniversity 3.ManojT.Thomas,Instituteof Rural Management Anand 4. Prarthan B Desai, Indian InstituteofManagement, Bangalore Mexican Maquilas and Indian BPOs: A CriticalComparison UnderstandingUrbantoRural OutsourcinginIndia:Basisand Potential IdentificationTowardsClientsin EmployeesofOutsourcingService Providers 1. Amarendu Nandy and Mukul G.Asher,NationalUniversityof Singapore 2. Gulnar Sharma and Sanjay Kaptan,JankideviBajajInstitute of Manangement, Mumbai Demographic Complementarities and Outsourcing:ImplicationsforIndia BPO and Employment Scenario in the Indian Economy 14 IMR Conference 2006
DETAILED SCHEDULE 1. Gyan Prakash and Avantika Singh,TezpurCentralUniversity; TERISchoolofAdvancedStudies, New Delhi 2. Vasanthi Srinivasan and Bineesh Kumar P, Indian InstituteofManagement, Bangalore 3. Abhishek Amal Sanyal, HSBC GlobalTechnology,Pune 4. SajalKabiraj1 ,D.P.Agrawal2 and Deepali Singh1 , ABV Indian InstituteofInformation Technology and Management, Gwalior1 ;Member,UPSC,Govt.of India2 5. Akash Prasad and Vivek Rathore,NALSARUniversityof Law,Hyderabad OutsourcingofHealthcareServicesin Rajasthan:AnExploratoryStudy Software Product Development Transition:ManagerialImplications fromaSubsidiaryPerspective ReverseOutsourcingthroughHybrid SourcingTM andItsEffectontheGlobal DeliveryModel Managing Strategic Change through OutsourcinginLogisticsCompanies:A SwedishPerspective IndiaInc.’sClaimtotheInternational DisputeResolutionMarket 11:00-13:00 ParallelSessionD2 ISSUES FROM SERVICE-PROVIDER INDUSTRIES 3. Arti Grover Goswami, Delhi SchoolofEconomics 4.SrinivasGunta,Indian InstituteofManagement Bangalore 5. Sourav Mukherji, Indian InstituteofManagement Bangalore TheWelfareImplicationsof OutsourcingintheHostCountry Co-locationofUnrelatedDivisionsin theITES-BPOIndustry:Dynamicsof ValueCreationandDestruction Outsourcing:PracticeinSearchofa Theory 13:00-14:00 LunchBreak IMR Conference 2006 15
DETAILED SCHEDULE Saturday, July 15, 2006 14:00-15:30 PanelDiscussion: GLOBAL COMPETITIVENESS THROUGH OUTSOURCING Mr.RavanBoddu,CEO,iSoftIndia Mr.AnoopHegde,CountryManager,FirstIndianCorporation Mr. Gopal Krishnan, Founder, Chairman and Managing Director,NinestarsInformationTechnologiesLimited Mr.SanjoyRoy Choudhary,AssistantVicePresident, Evalueserve Note:Thefour parallelsessionsforpaperpresentationaredenotedasA,B,C &D inthetable 16 IMR Conference 2006
ABSTRACTS OF PAPERS
RajanVaradarajan, DistinguishedProfessorofMarketingandFordChairin Marketing & E-Commerce, Department of Marketing, Mays Business School, TexasA&MUniversity. Ph: 979-845-5809, Fax: 979-862-2811, Varadarajan@tamu.edu Based on the chatter in the business press and the general news media, one might be inclinedtoviewoutsourcingasverymucha21stcenturyphenomenon,largelylimitedto businessprocessoutsourcingandtakingplaceforthemostpart,intheurbancentresofthe DeccanPlateauofIndia—Bangalore,Chennai,HyderabadandMumbai.Further,relativeto earlierwavesofoutsourcing,suchastheoutsourcingofmanufacturingofgoodsduringthe 1980sand1990s,thecurrentwaveofoutsourcingofperformanceofservicesseemstohave generated much more backlash, outcry and resentment. Some attribute this to the less educatedandlessvocalblue-collarworkersinindustrialisedcountrieshavingbeenaffected byoffshoreoutsourcinginthemanufacturingsectorduringthe1980sand1990sversusthe bettereducatedandmorevocalwhitecollarworkersandprofessionalsinindustrialised countriesbeingaffectedbythecurrentwaveofoffshoreoutsourcingintheservicesector. Whenoutsourcingmanifestsassubstitutionoflabourwithtechnology,itiswidelyviewed asamarkoftechnologicalprogress.Casesinpointincludemoderndayautomatedtelephone exchanges performing tasks that were earlier performed by telephone operators, and automated teller machines performing tasks that were performed by human tellers. When outsourcingmanifestsasacustomerperformingtasksthatwereearlierperformedbythe firm,itischaracterisedas‘customerparticipation/involvementintheco-productionof service’andspawnsanewfieldofacademicinquiry.Forinstance,airlinecustomers,in additiontomakingreservationson-line,performingrelatedtaskssuchasseatselection andpre-printingofboardingpassathomeorwork,beforeheadingtotheairport(outsourcing tocustomers).Understandably,inthefaceofincreasingjetfuelprices,limitstolowering labourcosts,intensecompetitionthatlimitstheabilityofairlinestoraiseprices,outsourcing tootherfirmsandtocustomersbecomesacompetitiveimperative.Againstthisbackdrop, the paper focuses on the comparative advantage, competitive advantage and competitive imperativeaspectsoftheglobaloutsourcingofmanufacturingofgoodsandperformanceof services. COMPARATIVE ADVANTAGE, COMPETITIVE ADVANTAGE, COMPETITIVE IMPERATIVE AND GLOBAL OUTSOURCING COMPARATIVE ADVANTAGE, COMPETITIVE ADVANTAGE, COMPETITIVE IMPERATIVE AND GLOBAL OUTSOURCING IMR Conference 2006 19
GLOBAL OUTSOURCING OF SERVICES AND DEVELOPMENT IN DELIVERY COUNTRIES Rupa Chanda, Professor of Economics, Indian Institute of Management, Bangalore. rupa@iimb.ernet.in Thispaperexaminestheimplicationsofglobaloutsourcingofservicesforvariousaspects ofeconomic,social,andhumandevelopmentinselecteddeliveryeconomiesinAsia,namely, Philippines,China,andIndia.Thepaperisasynthesisofthefindingsacrossthesethree countriesandprovidesacomparativeperspectiveontheimpactofservicesoutsourcingon theseeconomies.Theanalysisisbasedonaprimarysurveyandin-depthinterviewsconducted ineachofthethreetargetcountriesintheJanuary2005-February2006period,supplemented byinformationavailablefromvarioussecondarysources. Therearebroadlythreepartstothepaper.Thefirstpartdrawsupontheevidenceobtained fromtheprimarysurveyandin-depthinterviewstohighlightthemaincharacteristicsof theservicesoutsourcingindustryinthethreecountries,i.e.,thetypesofservicesoutsourced andsectorswhereoutsourcingoccurs,thenatureofthisoutsourcedworkacrossthevalue chain,thegeographicprofileofoutsourcing,thecharacteristicsofdeliveryfirmsinterms oftheirsize,diversificationofactivities,employment,features,ownershipstatus,and modeofexecution,amongothers.Thissectionalsohighlightsthemainfacilitatorsand constraintstoservicesoutsourcinginthethreecountries.Corroboratingdatatablesand simplecorrelationanalysisacrosskeyvariablesareprovidedtovalidatethediscussionand toshedfurtherinsightontheprofileofthisindustryineachcountryandtodrawcomparisons acrossthethreecountries. Thesecondpart,whichconstitutesthecoreoftheanalysisinthispaper,assessesthe impactofservicesoutsourcingonawiderangeofparameters.Someofthemaindimensions ofdevelopmentthatareaddressedinclude:directandindirectemployment;incomes;skill, knowledge,andtechnologytransfer;domesticandforeigninvestment;infrastructure;social andculturalnorms;occupationalhealth,andinter-sectoralresourceallocation.Corroborating datatablesaswellascorrelationanalysisareprovidedtohighlightthenatureoftheimpact ineachcountryandtohighlightsimilaritiesanddifferencesacrossthethreecountries. Thefinalsectiondrawsupontheanalysisintheprecedingsectionsaswellasthesurvey andinterviewresultstosuggestpoliciesrequiredatvariouslevelstonotonlyfacilitatethe growthoftheservicesoutsourcingindustryinthesethreecountries,buttoalsomakethis growthconducivetorealisinglongtermsocial,economic,andhumandevelopmentobjectives inasustainableandequitablemanner. 20 IMR Conference 2006
OUTSOURCING AS A SELF-CORRECTING PHENOMENON: A GAIA HYPOTHESIS PERSPECTIVE AnandaMukherji, AssociateProfessorofManagement,Dept.ofManagement, MarketingandInternationalBusiness,CollegeofBusinessAdministration, TexasA&MInternationalUniversity,USA. Ph: 956-326-2526, Fax: 956-326-2494, max@tamiu.edu Jyotsna Mukherji, Assistant Professor of Marketing, Department of Management, Marketing and International Business, College of Business Administration,TexasA&MInternationalUniversity,USA. Ph: 956-326-2542, Fax: 956-326-2494, jyo@tamiu.edu Inourpaper,webrieflyexamineoutsourcingfromthetraditionaltransactioncosteconomics (TCE)perspective.Wethenexaminetheforcesthatdriveglobalisation.Wepresentoutsourcing fromtheGaiaself-regulatinghypothesisperspective.Wearguethatwiththephenomenonof outsourcing,asetofinterdependentforcesisreachingacriticalmass.Thiswillresultinunintended outcomesthatgofarbeyondacompany’sintenttoreducecosts. Therearetwoimportantfactorsthatexplainglobalisation,whichinturnfacilitatesoutsourcing. Thefirstarefourdrivers–expandingmarkets,pressuretolowercosts,increasedcompetition, andactivistgovernments.Thesecondistheincreasedlevelsofservice-relatedoutsourcing, whichisenabledbytechnologiesanddigitalisation.Withemploymentinthedevelopedeconomies beingpredominantlyintheservicesector,thereisconsiderableeconomicandpoliticalconcern aboutthelong-termimplicationsofservicejobsmovingtodevelopingcountries. We propose a different, though complementary perspective to the current outsourcing phenomenon.TheanalogyweuseistheGaiaself-regulatinghypothesis.Theprocessofself- regulationiscentraltotheGaia‘livingearth’hypothesiswheretheearthisseenasatightly coupledselfregulatorysystem.Outsourcingispartofaseriesofinterconnectedforcesthatisfar morethantheobviousoptimisationofcosts. Theinterconnectedforcesindevelopingcountries,likeIndiaandChina,thathavebeensupporting andfacilitatingoutsourcing, includetheagedemographicsthatsupportaproductiveworkforce, educationallevels,risingaspirations,apost-postcolonialmindsetofthepopulace,improved infrastructure,andcoherentgovernmentalpolicies,amongothers.However,wecontendthat theremaybeanumberofunintendedconsequences,whichweexplore.Incomelevelsindeveloping countrieslikeIndiaandChinaarelikelytorise,makingthemattractivemarketswithdisposable incomes.Wealsoforeseeafallinincomelevelsandconsumptionindevelopedcountries.The currentpatternofconsumptionisextremelyskewedwiththedevelopedworldconsumingata disproportionaterate.Theunintendedself-correctionthatresultsfromoutsourcingwillbalance thecurrentdisproportionalpatternofincomeandconsumption. Therearelikelytobeshiftsin thebalanceofeconomicandpoliticalpowerastheself-correctionplaysout. Webelievethattheperspectivewepresentinthispaperenablesustogobeyondthebusiness perspectiveofoutsourcingandincludeinouranalysisamuchlargerworldsystemperspective. IMR Conference 2006 21
OUTSOURCING R&D: THE NEXT FRONTIER Jason M Pattit, PhD Candidate, Technology Strategy and Innovation Management, Snyder Centre for Innovation Management, Whitman School of Management,SyracuseUniversity. Ph: 315- 443-3443, jmpattit@syr.edu SPRaj,ProfessorofMarketing,CornellUniversity,Ithaca,NY. Ph: 607-254-5068, spr24@cornell.edu David Wilemon, Earl and Josephine Snyder Professor of Innovation and Entrepreneurship; Academic Director, Programme in Entrepreneurship and Emerging Enterprises, Director, Earl V Synder Centre for Innovation Management, Whitman School of Management, Syracuse University. Ph: 607-254-5068, dwilemon@som.syr.edu Overthelastcentury,mostfirmshaveprimarilyreliedontheirinternallaboratoriesfor R&D. The output from R&D helped to increase profits from organic growth through the developmentofnewproductsandprocesses.However,theincreasedmobilityandavailability ofknowledgeworkers,governmenttechnologyinitiativesandregulations,andtheglobal interconnectednessoffirmsduetotelecommunicationsandtheInternethavecontributed to the erosion of the dominance of the centralised corporate R&D lab and the increased fragmentationofsourcesofspecialisedknowledge.Additionally,developingcomplexnew productsandsystemsoftenrequirestheintegrationof‘deep’knowledgeandskillsfrom disparatetechnicalandscientificfields.Consequently,firmslackingadequatetechnical andscientificcompetenciestocompletelydevelopcomplexproductsandsystemsfrequently looktoexternalsourcesofknowledgeandtechnologytosupplementinternalexpertise. Collectively,thesefactorshavecontributedtoashiftintheinnovationlandscapetoa paradigmofOpenInnovation.Thisshifthasimplicationsforthesourcingofbasicscientific researchandthedevelopmentofcommercialisabletechnologies.Inthisarticleweexamine howavarietyoffactorsinfluencesthedecisiontooutsourceR&DinanOpenInnovation paradigm.Wealsodiscussissuesrelevanttomanagersstrugglingtocometogripswiththe emerging Open Innovation paradigm. 22 IMR Conference 2006
R&D/KNOWLEDGE PROCESS OUTSOURCING FROM JAPAN: AN UNEXPLORED COMPETITIVENESS OPPORTUNITY? K Momaya, AssociateProfessor,DepartmentofManagementStudies,IITDelhi. Ph: 91-80-26591174, Fax: +011 2686 2620, momaya@dms.iitd.ernet.in Outsourcing(OS)hasbeenaroundforagesandcanhaveasynergisticimpactonanindustry or business ecosystem (e.g. Keiretsu in Japan). Globalisation of OS has created many opportunitiesforfirmsinIndia.Havingbuiltsomefoundations(skills,capabilities,business models),progressivefirmsfromIndiahavetakentheinitiativetomoveupthevaluepyramid. ResearchindicatesthatKnowledgeProcessOutsourcing(KPO)maybeonesuchinitiative up the value pyramid and may turn out to be the next wave for India. At the same time, muchbiggeropportunitieslieinotheremergingindustriessuchasthecontentsindustry andallopportunitiesneedtobeexploredwithstrategicthinking. Thekeypurposeofthispaperistoexplorethelittleexploredopportunityofmanagement researchoutsourcingfromJapanasasourceofcompetitiveness.Systematicmethodology willbeusedtofocusonthemostrelevantelementsofoutsourcingforcompetitiveness. Exampleswillbegiventoillustratethatbiggeropportunitiesmaybeavailableinother industriesthansoftwareservicesandBPO,andinotherregionsandniches.Indicativekey questionsthatencouragestrategicthinkinghavebeenevolvedandgrouped. Takingcues from some experiments in more challenging R&D outsourcing, an attempt will be made to discussthefindingsfromapilotofKPO(R&DServices)beingdevelopedattheDepartment ofManagementStudies,IITD.Keyelementsofthepilotwillbediscussedandglimpseswill be given of value creation opportunities in cooperation with Japanese industries and institutes.Learningwillbesynthesisedandimplicationsdrawn.Keyleadershipinsightsare expectedtoemergeonthefollowingquestions: l HavingsucceededinEnglishspeakingmarkets,canJapanbethenextlevelofchallenge forcapablefirmsfromIndia? l AremarketsinemergingindustriesinJapanattractiveenough? l WhydoescooperationwithJapanremainalessexploredopportunityinIndia? l What can be the key areas of opportunity? l WhatarethekeysuccessfactorsintheKPOnicheinJapan? Keywords:CorporateCompetitiveness,KnowledgeProcessOutsourcing,Japan,StrategicOptions IMR Conference 2006 23
BUSINESS PROCESS OUTSOURCING: KNOWLEDGE MANAGEMENT AS A COMPETITIVE STRATEGY K Manasa, Knowledge Management consultant, Wipro Technologies, Bangalore. Ph: 080-25502001, Fax: 080-25502160, manasa.kakulavarapu@wipro.com Kailash B L Srivastava, Associate Professor, Department of Humanities & SocialSciences,IITKharagpur. Ph: 03222-283624, kbls@hss.iitkgp.ernet.in Businessprocessoutsourcing,oneofthefastestgrowingsegmentsoftheITenabledservices industry,isdeterminedbythenatureofindustry,coordinationandcontrolmechanism, productmaturity,andlevelofinter-firmcompetition.Withincreasedcompetitioninthe BPOsector,Indianfirmshavetocontinuouslyprovetheircapabilitiestodeliverandcreate nearindispensablesituationsfortheparentorganisationtosurvivewithoutthem.This requiresnotonlytechnicalanddomainexpertisebutalsorefinedsystemsandpracticesto better serve customers and manage growth and challenge. Knowledge management (KM) as a strategy has immense potential to help BPOs gain competitiveedgebyprovidingvalueaddedservices.KMcanalsohelpaddresspainareas likeidentifyingdomainspecificskillscriticaltobusinessprocessthatisoutsourced, facilitatingfasterrampupamongfreshentrantsandretentionofvitalknowledgethatis likelytobelostduetohighattritionrates.Despitethelargebodyofliteratureonknowledge managementinavarietyofsettings,thereisapaucityofresearchassessingtheroleof knowledge management in the outsourcing business. Drawing from the research in the software services industry, this paper proposes ideas and guidelines on how knowledge managementcanbeimplementedtodeliversuperiorqualityandvalueaddedservices. Further,thepaperalsobrieflydiscussesthegrowingneedforsoundknowledgemanagement as the outsourcing vendors move up the value chain by providing high-end services i.e. ‘Knowledge process outsourcing’. The nature of knowledge work/services that can be outsourcedandtheroleofknowledgemanagementinenablingthecaptureandacquisition ofknowledgethroughtheoutsourcingrelationshiparealsodiscussed. 24 IMR Conference 2006
BPO ADOPTION BY SMALL AND MEDIUM ENTERPRISES: AN INNOVATION-BASED APPROACH Pradeep Mukherjee, President & Managing Partner, Tholons, Asia Pacific Headquarters,Bangalore. Ph: 91-80-41325618, pradeep@tholons.com Abhijit Chaudhury, Professor, CIS Department, Bryant University, Rhode Island. Ph: 401-232-6418, Fax: 401-232-6435, achaudhu@bryant.edu NishantVerma,Principal,Tholons,AsiaPacificHeadquarters,Bangalore. Thetrendofbusinessprocessoutsourcing(BPO)isstrongintheWestandhasnowstarted tospreadamongsmallandmediumenterprises(SMEs),whoareusuallylaggardsinadopting suchinnovations.Thepurposeofthisstudyistoinvestigatefactorscontributingtothe adoption of BPO by SMEs in Western countries. The research model is based on Rogers’ diffusion of innovation (DOI) theory, according to which innovation is the adoption of ideasthatarenewtotheadoptingorganisations.InDOI,diffusionistheprocessbywhich an innovation is communicated through certain channels over time among members of a socialsystem.Theprocesshasseveralstages.Rogers,definesthediffusionstageasthe processthroughwhichthenewideaspreadsandtheadoptionprocessasthe‘mentalprocess throughwhichanindividualpasses…frominnovationtofinaladoption’. ThefocusofthisresearchisontheprocessofdiffusionandadoptionofBPOasanewidea. In the context of the literature on DOI, our model posits that it is the fit among four independentvariablesthatdeterminestheadoptionofaninnovation,thedependentvariable. Thefourfactorsare:innovationprofileorthecharacteristicsthatfavourtheadoptionofan innovation;innovatorprofile;environmentalcharacteristics;andsystemcharacteristics. ThemodelisappliedtoSMEs.Throughaliteraturesurvey,thegeneralcharacteristicsof SMEsaredeterminedintermsofformalisation,centralisationofdecision-making,diversity, sizeandeducation. Given such characteristics, the model recommends that the vendor community seek firms thatarelikelytobeearlyadopters(innovatorprofile),selectanSMEsectorwherecompetitive pressures are high, which is homogenous and big so as to permit economies of scale (environmentalcharacteristics),promotetrialabilityandobservabilityoftheirsolution (innovationprofile),andprovideadequatetrainingandlearningopportunitiestotheir clients(systemcharacteristics). IMR Conference 2006 25
SHIFTS IN KNOWLEDGE-INTENSITY AND SME INTERNATIONALISATION: DIVERSIFYING FROM SOFTWARE SERVICES TO PRODUCTS Shameen Prashantham, AIM Research Fellow, University of Strathclyde, GraduateSchoolofBusiness,Glasgow,UnitedKingdom. Ph:+44-141-5536107,Fax:+44-141-5528851, Shameen@gsb.strath.ac.uk Naveen Marimuthu, Mindtree Consulting,Bangalore. Ph: +91 22 5644 5735, namarimuthu@deloitte.com Globaloutsourcingisfuellingtheentrepreneurialstrategyofenteringinternationalmarkets onthepartofsmallerfirmsintechnology-intensivesectors.Whiletraditionalviewsof internationalisation have emphasised the importance of market knowledge, more recent researchattheintersectionofstrategy,entrepreneurshipandinternationalbusinesspoints totheimportanceofknowledge-intensityindrivingthesefirms’internationalisation. Despiteconsiderableresearchontheinternationalisationofsmallertechnology-intensive firms,littleattentionhasbeenpaidintheliteraturetoupwardshiftsinknowledge-intensity thatfirmsmayengagein.Knowledge-intensiveofferingsaregenerallytakenasagivenand onlymarket-relatedchangeshavebeentypicallyconsidered.However,aprimarymotivation for internationalisation is growth and growth stems from vital resources that can be strengthenedorimproved.Itthusseemsquitelikelythatsomefirmswouldseektoenhance theirknowledge-intensityandfosterfurthergrowth,especiallyininternationalmarkets. Thisstudyaddressesthisgapbyinducingtheorythroughcase-studyresearchonaBritish software SME. The software industry – a setting for several studies on small firm internationalisation–offersthepossibilityofstudyinganupwardshiftinknowledge- intensityviz.diversificationfromservicestoproducts.Thestudydeepensunderstandingof therelationshipbetweenenhancementofknowledge-intensityandinternationalgrowth. Thecentralargumentisthatthisrelationshipispositivelymoderatedbycognitive(e.g. opportunity-seeking)abilities,managementoforganisationcultureandabsorptivecapacity i.e.theabilitytolearn.Ourcontributiontotheliteratureisthree-fold.First,weprovidea moreholisticperspectiveofentrepreneurialinternationalisationbyalsotakingintoaccount product-related strategic change (prior to market-related strategic change i.e. internationalisation). Second, the study enhances the learning perspective of internationalisationbyincorporatingcognitionandabsorptivecapacity.Third,wehighlight theroleofoverlookedorganisationalcharacteristicssuchasorganisationalculture.The paperalsodiscussesimplicationsforpractitionersandresearch. 26 IMR Conference 2006
ENTREPRENEURIAL GLOBALISATION: LESSONS FROM THE EXPERIENCES OF EUROPEAN SMALL AND MEDIUM ENTERPRISES U Srinivasa Rangan, Associate Professor of Strategy and International Business, Babson College, MA 02457, USA. Ph: 781-239-4237, rangan@babson.edu PeterSchumacher,PresidentandCEO,ValueLeadershipGroupInc,Frankfurt. Ph:+49-(0)-69-975-03406Fax:+49-(0)-69-975-03200, p.schumacher@value-leadership.com Indiaasadestinationofbusinessprocessoutsourcingandsoftwaredevelopmentisnowa widely recognised fact. Many American and several European multinational corporations have sought to exploit India’s low labour cost advantage in such areas. More recently, though,theseinternationalfirmshaveexpandedtheiruseofIndia’slowcosttalentpools in additional areas such as engineering, product design and development, and applied research.Theexperiencesofmanyofthesefirmshavebeenwrittenaboutinthepopular press,inbusinessschoolcasestudies,andinsomeacademicpapers.Themainthrustof muchofthiswritingistodemonstratehowaccesstolowcostfactorinputsinplacessuch asIndiaprovidesanopportunityforfirmstocompetemoreprofitablyinanincreasingly integratedworldwherefirms,multinationalorotherwise,facefiercecompetition.Whatis missingisanyrecognitionofawiderimplicationofglobalisationoffactormarkets. Inthispaper,theauthorsarguethatwiththeopportunitysetfordistributingthevalue chainofactivitiesacrosstheworldwiththearrivalofcountriessuchasIndia,internationally orientedfirmsalsoenjoytheopportunitytomoreentrepreneuriallyrethinktheircompetitive strategies.Suchanentrepreneurialglobalisationapproach,however,callsforsimultaneous changesinmultipleaspectsoftheorganisation.Morenimblefirms,oftensmallandmedium sizedones,areperhapsinabetterpositiontotakeadvantageofsuchastrategicapproach. BasedonseveralcasestudiesofEuropeansmallandmediumsizedenterprises(SMEs),the authors demonstrate how firms have sought to rethink their businesses from ground up, reconfiguretheirvaluechainactivitiesglobally,leveragetheresourcesofotherfirms, createstrategicoptionsfortheirfirms,andhaveimprovedtheircompetitivepositioninthe market place. The authors suggest that these SMEs may well be in the vanguard of an industrialrenaissanceinEurope,acontinentthathashithertobeenlesswellreceptiveto theuseofoff-shoreopportunitiesofferedbycountriessuchasIndia. The authors conclude with managerial recommendations as to how firms, small and large, couldtakeadvantageofglobalfactormarketsthroughcreativeandentrepreneurialstrategies. Theyalsoraisesomeadditionalresearchquestions,especiallyrelatingtoorganisational andmanagerialchallengesposedbyamoregloballydistributedassetandcapabilitysetfor firmsseekingtobeentrepreneuriallyglobal. IMR Conference 2006 27
THE PERCEIVED IMPACT OF OUTSOURCING ON SMALL AND MEDIUM INDUSTRIES Jogendra Kumar Nayak, PhD student, IIT Kharagpur and Lecturer (Senior),RegionalCollegeofManagement,BijuPattnaikTechnical University,Orissa. jognayak@yahoo.com GautamSinha,Professor,IITKharagpur. KalyanKGuin,Professor,IITKharagpur. Recentliteraturesuggeststhatoutsourcing,properlyunderstoodandmanagedasanintegral partofstrategy,canaidcompetitiveness.Ontheotherhand,industryevidencesuggests that if overdone it could create a fragile organisation in the long run — the hollow corporation. This paper examines the reasons for outsourcing and its impact on the performanceoffirms.Anempiricalmethodwasadoptedandfirmswerestudiedonthebasis ofaquestionnairestudy.Thisstudyhashelpedinanalysingthevariousfacetsofoutsourcing anditsrelativeimportance.Itwouldactasaguidingtoolforpractitionersandresearchers. 28 IMR Conference 2006
BENCHMARKING KNOWLEDGE GAPS FOR ASSESSING OUTSOURCING VIABILITY Sandhya Shekhar, Department of Management Studies, Indian Institute of TechnologyMadras. Ph: 91-44-22574550; Fax: 91-44-22574552, sandhya@iitm.ac.in L S Ganesh, Department of Management Studies, Indian Institute of TechnologyMadras. Ph: 91-44-22574551; Fax: 91-44-22574552, lsg@iitm.ac.in Globaloutsourcingisclearlyoneofthemajortrendsinrecenttimes.Whilethereisasurfeit ofarticlesandpapersaboutthisphenomenon,thereislittleresearchonriskmitigation strategiesforoutsourcingpartnerselection.Oneofthemajorriskfactorsisonaccountof knowledgegapsbetweentheoutsourcingorganisationandtheexternalprovider.Thispaper positsthatsincetheknowledgedimensionisacriticaloneforanyoutsourcedactivity,its objectiveassessmentisimportantintheoverallprocessofevaluationoftheexternalprovider. Thepaperproposesaformalprocessof‘knowledgegapassessment’toaddressthisfactor andasaninputtoassessingpartnerviability.Italsoidentifiestwoimportantdimensions thatarespecifictoanoutsourcingrelationshipthatwouldmakethisexercisesignificantly differenttoaknowledgegapassessmenttakenupinotherorganisationalcontexts.Finally thispaperoutlinesaconceptualmodelthattakesthesedimensionsintoaccountthrougha process of benchmarking and could be used as a generic tool for performing such an assessmentnotjustinanoutsourcingrelationshipbutinanyinter-organisationalcontext. IMR Conference 2006 29
LEVERAGING OUTSOURCING – PERFORMANCE OF AND IMPLICATIONS FOR INDIAN INFORMATION TECHNOLOGY SERVICES INDUSTRY Srinivas Ainavolu, FellowshipStudent,StrategicManagementGroup, Indian InstituteofManagementCalcutta. Ph:033-28680490,Fax:033-24678062,srini@iimcal.ac.in Intheservicesdomain,theIndianinformationtechnology(IT)servicesindustryhasbeen oneofthebiggestbeneficiariesofoutsourcing.However,Indianvendorstraditionallyhave focusedontheexportmarket,possiblybecauseofthesmallersizeandlowerattractionof thedomesticmarketintermsofprofitability.Thecurrentdomesticmarketisathirdofthe exportmarket.TheIndianITservicesindustryisalsofairlyconcentrated.Thetopfivefirms haveacombinedshareofathirdofindustrysalesandthetoptwentyfirmstogethershare halftheindustryrevenues.Theindustryhasbeenquiteinnovativeinleveragingtheoffshore outsourcing model and has been growing at over thirty percent in the last decade. The currentnumberofplayersintheindustryisoverthreethousand.Manyofthesearesmallin size.Theplayersareofdifferenttypesandcanbeclassifiedintolarge,mediumandsmall IndianITservicesvendors,largeglobalITservicesplayersandfinally,smalleroverseasIT vendors.ThefocusofthispaperisonIndianvendors. CurrentlyIndianvendorsaretryingtomoveupthevaluecurveandarebiddingforhigher valueandbiggercontractsatthegloballevelandmanylargeIndianITservicesfirmshave been successful as primary vendors at the global level. At the same time, the domestic marketisincreasinglybeingcateredtobylargeglobalfirmswhoareservicinghighervalue andlargecontracts.Undertakinghighervalueworkdomesticallyandreplicatingtheexperience overseas would have been a more credible option for Indian firms as their traditional offshorebasedoutsourcingmodeliseasilyreplicable.Theincreasinguseofprimaryoffshoring bylargeglobalservicefirmsisanotherchallengetoIndianfirmsandhencethereisthe needforamoresustainablyadvantageouscompetitivemodel. Asoldmodelsandassumptionsarequicklygivingway,whatcapabilitiesdoIndianvendors needforeffectivelymeetingthechallengesofthefuture?Thispaperexaminesthecurrent performanceofIndianplayersandfocusesonwhattheyneedtoadoptinthelightofthe challenges. Combining data from industry databases with that of primary interview investigationsconductedwithindustrypersonnel,itdiscussesthechallengesbeforethese playersinthecontextofthematuringoftheindustry,openingupofnewercompetition andincreasedrampingupbyglobalmajors.Theimplicationsofthechangingcontextand thenormativemeasuresforIndianITservicevendorsarepresentedindetail. 30 IMR Conference 2006
OUTSOURCING AND TRANSFER PRICING CHALLENGES Suveera Gill, Reader, University Business School, Panjab University. Ph: +91-172- 2212389/2212398, Fax: 91-172-2541591, gillsuveera@yahoo.com Theworldhaswitnessedfundamentalchangesininternationalbusinessduringthelasttwo decades.Theflowofgoods,servicesandcapitalacrosscountrieshasincreasedmanifold. Entitiesarenolongerrestrictingtheiroperationstothedomesticmarketandhaveexpanded acrossinternationalbordersrapidly,becomingmultinationalandtransnationalenterprises. Tofurtherincreasetheircompetitiveness,manyenterprisesareturningtobusinessprocess outsourcing (BPO) and India has emerged as a prominent outsourcing hub. Traditional outsourcinghasincreasedinscopeandimpact,withtheinclusionofBPOandoffshoring, whichsavepreciousmanagementtimeandresourcesandalloworganisationstobuildupon corecompetencies.However,outsourcingcomeswithitsownchallengesandrisks. Oneoftheparamountconcernsofenterprisestodayisthedeterminationofthepriceat whichtherelatedpartiesselltheirproducts,offerservices,providefundsorconductresearch and development — commonly referred to as transfer pricing (TP). With ever increasing outsourcingandtheintroductionofTPrulesandregulationsbymoreandmorecountries, enterprisesaresubjecttoconflictingrulesanddoubletaxation.Thispapertracesthese differencesamongcountrieswhichhaveresultedindisputesbothbetweentaxauthorities andbetweentaxauthoritiesandtaxpayers.TheTPDirectorateinIndiawhichcarriedout its first audit in 2005 has already zeroed in on 250 companies for Rs. 1,250 crores of additionaltaxfortheircross-bordertransactions.TheoutstandingduesoftheIncomeTax departmentaresettorisefurtherandaslewofmultinationals,cuttingacrosssectors,have contested demands raised on them for violations of TP norms. While many multinationals havealreadyfiledappealschallengingtheirtaxdemands,afewothersareplanningtotake recoursetothemutualagreementprocedure(MAP).Thispaperscrutinisesthedecisionson variousTPcasesinIndiasoastoidentifythetaxationissueswhichneedtobeaddressed. Thepaperconcludesbyrecommendingtransferpricingreviewonsomeimportantissueslike taxability of permanent establishment (PE), advance price agreements (APA) and characterisationofnon-feebaseddealslikeroyalty,technicalfeesandservices,soasto ensurethattaxpayersmaximisetheirglobaltaxpositionandthatthetaxableprofitreturned doesreflecttheeconomicactivityperformedineachtaxjurisdiction. IMR Conference 2006 31
CORPORATE ENTREPRENEURSHIP MODEL: A SOURCE OF GLOBAL COMPETITIVENESS BRBhardwaj, PhDstudent,IITDelhiandfaculty,BharartiVidyapeeth Institute of Management & Research, New Delhi. Phone: 9811545647, brotorauth@yahoo.com Sushil,ProfessorandChair,StrategicManagementGroup,Department ofManagementStudies,IndianInstituteofTechnology,Delhi. Ph: 91-80-26591189, sushil@dms.iitd.ernet.in KMomaya,AssociateProfessor,IITDelhi. Ph: 91-80-26591895, momaya@dms.iitd.ernet.in Thepurposeofthispaperistoexplorecorporateentrepreneurship(CE)asthesourceof competitiveness.TheobjectiveistodevelopaCEModelthatincludestheantecedentsof CE, and the parameters of competitiveness. This model can be used to enhance competitivenessintheglobalmarket.Applicationofregressionandcorrelationanalysis hasbeenshownindetail. Keywords:corporateentrepreneurship,competitiveness 32 IMR Conference 2006
INDO US FTA: PROSPECTS FOR IT-ENABLED/BPO SERVICES ArpitaMukherjee,SeniorFellow,IndianCouncilforResearchonInternational EconomicRelations(ICRIER). Ph:91-11-24645218-20,arpita@icrier.res.in Paramita Deb Gupta, Research Assistant, Indian Council for Research on InternationalEconomicRelations(ICRIER). Ph: 91-11- 2464 5218-20, paramita@icrier.res.in Withincreasedglobalisationanddevelopmentofinformationtechnology,developedcountries suchastheUSarerelocatingalargecomponentofback-officeservices(forexample,payroll) andfront-officeservices(forexample,customercare)todevelopingcountriessuchas India.Suchrelocationshelpthecompaniesinreducingcostsandatthesametimemaintain sameorachievehigherlevelsofproductivityandefficiency.InIndia,relocationhasledto economic development, creation of employment, increase in wages, growth of ancillary industriesandinvestmentininfrastructure.Inspiteofthebenefits,someoftheUSstates, inrecentyears,haveenactedanti-outsourcingregulations,primarilytoprotectdomestic employment. Both India and the US have expressed interest in entering into an Free Trade Agreement (FTA). Although it is yet to be decided whether the agreement would cover only service sectors or it would be all comprehensive (covering goods, services, investment, trade facilitation,etc.),ithasbeenagreedthatIT-enabled/BPOserviceswillbeapriorityarea forFTAnegotiationsfromtheIndianperspective.Thecomplexityofthenegotiationsstems fromthefactthatthisisacross-sectoralissue,i.e.,itaffectsmorethanoneservicesector. Inthiscontext,thisstudydiscussesthecurrenttradeflowsbetweenIndiaandtheUSin thissector,highlightstheareasoftradepotential,recentregulatoryandotherdevelopments andtheirimplication,andbarrierstotrade.Thestudyisbasedonacountry-widesurveyof 112IT-enabled/BPOcompanies(95independentand17captive),whichhaveallormajority businesswiththeUS.ItdiscussestowhatextentIndiaandtheUSarelikelytoliberalise multilaterallyintheon-goingDohaRoundofnegotiations.Italsodiscussestheextentof liberalisationundertakenbytheUSandIndiaintheirotherbilateralagreements.Basedon thebarriersfacedbyIndiancompaniesintheUSandwhattheUSisofferingtoitstrading partnersinbilateralagreements,itsuggestsIndia’snegotiatingstrategiesanddiscusses whattheUSislikelytoaskreciprocally.ItfocusesonhowtheFTAcanbemutuallybeneficial. Finally,itsuggestsdomesticreformswhichwouldimproveproductivity,efficiencyandglobal competitivenessofthesectorandenableIndiatobenefitfromthebilateralliberalisation. IMR Conference 2006 33
SPILLOVERS FROM FOREIGN DIRECT INVESTMENT AND ABSORPTIVE CAPACITY OF FIRMS: EVIDENCE FROM INDIAN MANUFACTURING INDUSTRY AFTER LIBERALISATION TJJoseph, PostDoctoralFellow,ICFAIInstituteforManagementTeachers (IIMT), Hyderabad – 500034. Ph: +91-40-23430474/ 23430494 / 23430254; Fax: +91-40-23430468, tjjoseph@gmail.com Foreigndirectinvestment(FDI)throughmultinationalenterprises(MNEs)isrecognisedas an important channel in bridging the technological gap between rich and poor countries throughacontinualprocessofinternationaltransferanddiffusionoftechnology.FDIis expectedtogenerateasetofexternalitiesondomesticproducers,whichareoftenreferred toas‘spillovers’.Domesticfirmsaresupposedtoincreasetheirproductivitybyadoptingthe brandnewtechnologiesofMNEs,knownashorizontal(intra-industry)spilloversfromFDI. Domesticfirmsmayalsobenefitwhentheyareemployedassuppliersorsubcontractorsto MNEs that helps them to expand output and achieve economies of scale. Such type of externalitiesarereferredtoasvertical(inter-industry)spillovers.However,thesespillovers do not occur naturally and depend on the ability of the domestic firms to absorb such knowledgespillovers. Theobjectiveofthisstudyistoanalysethespillovereffectsofbothhorizontalandbackward spilloversfromFDIontheproductivityofdomesticfirms,andtheroleofin-houseR&Dof domesticfirmsindeterminingtheabsorptivecapacityofspillovers.Thestudyanalyses paneldataforIndianmanufacturingfirmsfortheperiod1993-2004.Thespillovereffectsof FDIontheproductivityofdomesticfirmsaremeasuredincorporatingdifferentpossible spillovervariablesinanextendedproductionfunction.Sinceproductivitycanbeinfluenced byfirm-specifictechnologicalfactorsaswell,varioustechnologyvariablesareintroduced inthemodeltocontrolforsuchfactors.Theroleoftheabsorptivecapacityofdomestic firmsisinvestigatedintroducinginteractionvariablesbetweenin-houseR&Dofdomestic firmsandvariousspillovervariables.Thespecifiedmodelsareestimatedusingpaneldata estimationtechniques. Thestudyshowsevidenceofpositivespillovereffectfromthemarketpresenceofforeign firms—anincreaseintheproductivityofdomesticfirms.Theresultsindicatethatthereis bothapositivecompetitioneffectfromthepresenceofforeignfirms(horizontaleffect) andapositiveverticaleffectduetobackwardlinkagesbetweendomesticfirmsandforeign firms,wherelocalfirmsactassuppliersofrawmaterialstotheforeignfirms.Whilethe technologicalcapabilityofdomesticsuppliersisfoundtobeacriticalfactorinabsorbing thepositivebackwardspilloversfromforeignfirms,suchcapabilitybuildingisnotvery importantfordomesticfirmsinthesameindustrysectorinordertoabsorbthepositive spillovers.Theresultssuggeststrongpolicyemphasisinfacilitatingthecreationofsupply networksaroundleadingforeignfirmsandpolicyincentivestoencourageR&Dactivities. 34 IMR Conference 2006
OFFSHORING IN EUROPE — EVIDENCE OF A TWO-WAY STREET FROM DENMARK Peter D Ørberg Jensen, Centre for Business and Development Studies, Copenhagen Business School, Denmark. Ph: +45-3815 3222, Fax: +45- 3815 3840, pj.ikl@cbs.dk Based on a large Danish survey covering companies in sectors with tradeable goods and services,thisworkingpaperpresentsresultsonoffshoringanditsjobimpactthataddnew perspectivestotheglobalisationdebate.Globalisationentailsacross-borderflowofjobs, butcontrarytothepictureofglobalisationportrayedinthemedia,itisnotaone-way street,butatwo-waystreet:Inthe2002-2005period,morejobswerecreatedasaresultof theoffshoringofactivitiestoEasternDenmarkfromcompaniesoutsideDenmark(i.e.inshored toDenmark)thanwereeliminatedduetooffshoringfromcompaniesintheDanishregion. Overall,theemploymenteffectsofbothoffshoringandinshoringwerefoundtobelimited withlessthanonepercentofalljobseitherlosttooffshoringorgainedvia‘inshoring’.We argue that for Denmark the worries in purely numerical terms regarding the employment effectsofglobalisationseemoverlyalarmist.However,thetrendsrevealedinthestudydo pose challenges for low-skilled labour — the group most negatively affected — and for highlyskilledspecialists,whofaceapressuretoupgradetheirskills.Wealsoarguethat policyimplicationscanbedrawninviewoftheresultstoensurethatlabourmarketsmeet thedemandsofglobalisingfirms. IMR Conference 2006 35
PRODUCTION FRAGMENTATION AND OUTSOURCING: IMPLICATIONS FOR INDIA’S GLOBAL TRADE INTEGRATION Sadhana Srivastava, Research Scholar, South Asian Studies Programme, National University of Singapore. artp0320@nus.edu.sg RahulSen,Fellow,RegionalEconomicStudies,InstituteofSoutheastAsian Studies(ISEAS),Singapore.rahul@iseas.edu.sg The linkages between Foreign Direct Investment (FDI) and trade have assumed greater importance with increasing globalisation and rapid advancement in information and communications technologies, resulting in reduction in the cost of communications and logisticssupport.Thishasenhancedthescopeofinternationalproductionfragmentation, definedasthecross-borderfragmentationofcomponentproduction/assemblywithinvertically integratedproductionprocesses,notonlyinmerchandisetrade,butalsoincreasinglyin tradeincommercialservices. This paper analyses the trends, patterns and implications of international production fragmentationinbothIndia’smerchandisetradeaswellasintransactionincommercial services. Theprincipalresearchquestionstobeinvestigatedareasfollows.First,whetherIndian manufacturing is indeed experiencing the phenomenon of international product fragmentation. This is captured by analysing the trade in parts and components in the manufacturingsector,forwhichdisaggregatedproductleveldataisused.Second,isthe extenttowhichsuchtradeisbeingfacilitatedbymultinationalsthatengageincross- borderintra-industrytrade.Forthispurpose,thepaperdecomposesIndia’smanufacturing tradeintoone-waytradeandintra-industrytrade(IIT).Whilealargeportionofone-way tradewouldbeinter-industrytradeasexplainedbythetraditionalcomparativeadvantage theory,itwouldalsoincludetradewithchangesincommoditycategoriesintheprocessof transactionsinverticallyfragmentedproductionchains.TheestimatesofthevolumeofIIT inIndia’smanufacturingprovideusefulinsightsonthemagnitudeofproductfragmentation. Finally,thepaperprovidesmorebroadestimatesofIITinIndia’scommercialservicestrade, tohighlightthegrowingimportanceofinternationalfragmentationinservicesbywayof the phenomenon of outsourcing and offshoring. TheanalysispointstothefactthatIndiaisexperiencinginternationalproductfragmentation inbothitsmerchandiseandcommercialservicestrade,withthelattersectorexperiencing largescaleoffshoringactivities,particularlyintheICT-enabledservices.However,compared tomostdevelopingeconomiesinAsia(particularlyinEastAsia),Indiaisonlybeginningto experienceproductfragmentationinitsmerchandisetrade,andhasasignificantpotential forexpansionofthesameintheareaofauto-parts,electronicsandelectricalmachinery. 36 IMR Conference 2006
DEALERSHIP – A SINGULAR ROUTE TO OUTSOURCING Priyan R Naik, Head, Product Support — Construction & Mining Business, Larsen&ToubroLtd.,Bangalore. Ph: 9844120053, Fax: 91-80-25580528, naikpr@larsentoubro.com Thepaperbringsouttheefficacyofusingauniquestrategyforoutsourcing.Outsourcingin theearthmovingindustryisuncommon,largelyduetotechnicalintricacies,technological obsolescence, unavailability of trained manpower and the sheer lack of exposure to the conceptsofoutsourcing. Thispaperdescribesanearthmovingandminingindustryframework,buttressedbysustainable strategies implemented to gain competitive advantage by outsourcing service and parts salestokeydealersacrossthecountry.Thebenefitsarenumerous:outstandingsaredown, workingcapitalisundercontrol,themarketexpands,availabilityandcoverageimproves, andmachineutilisationgoesup;meantimetorespond/repair(MTTR)valuesdropdramatically. Buttheimplementationprocessisarduous.Theavailabilityofdealercandidatesandthe viabilityofeachunitofdealershipareissues. Manpowerisaproblem.Channelconflicts ariseperiodically.Policieshavetobeevolvedateverystep. This paper describes the research methodology undertaken, the key managerial insights gained,therigourinvolved,thelargescaleanalysisthatwasundertakentoarrive at correctanswersandthelessonslearnt.Theauthorhaspresentedthisinhispersonalcapacity, asinformationabouttheactualorganisationsinvolvedinthisexerciseisnotinthepublic domain. IMR Conference 2006 37
BUILDING COMPETENCIES THROUGH MAINTENANCE OUTSOURCING IN MANUFACTURING FIRMS: A CASE STUDY OF AN INDIAN GLASS COMPANY Sanjay Choudhari, Faculty, School of Management, National Institute of Construction Management and Research (NICMAR), Pune. Mobile: 0 98 22 000 828, sanjay_iim@yahoo.com Venkata Reddy Muppani, PhD candidate, Shailesh J Mehta School of Management, IIT Bombay. muppani@iitb.ac.in Arunabh Prasad Gupta, second year PGDM student, School of Management, NICMAR Pune. Ashutosh Garg, second year PGDM student, School of Management, NICMAR Pune. Organisationshaveputinsignificantefforttoimprovequality,serviceandflexibilityand reducecosttoachieveworld-classperformance.Thesefirmsarestrivingfornewcompetitive advantagestobuildupontheirmanufacturingcapabilities.Formanyfirms,partofthis efforthasincludedanexaminationoftheactivitiesofthemaintenancefunction. Since maintenanceisanintegralpartofmanufacturing,itcansignificantlyinfluenceafirm’s competitiveness.Thedesiretoreducecostsandimproveservicelevelshasledmanycompanies to review the way they do their maintenance work and to come up with new solutions and strategies to develop and increase their competitiveness. Outsourcing is one of these strategiesthatcanleadtogreatercompetitivenessandhencemanyorganisationsarenow outsourcingmaintenancebesidesseveralin-houseactivities.Outsourcingfocusesontwo strategicwaysofdevelopingcompetitiveadvantage:first,concentratingtheorganisation’s resourcesandinvestmentsonwhatitdoesbesti.e.thefirm’scorecompetenceandsecond, outsourcingallotheractivitiesforwhichthecompanyhasneitherastrategicneednora specialcapability. Thispaper,throughanextensiveliteraturereview,examinestheissuesofoutsourcing maintenanceinmanufacturingfirms.Theexistingmaintenanceoutsourcingframeworksin literaturearecriticallyexamined.Afivestepframeworkthatwouldallowefficientand effective implementation of outsourcing maintenance has been developed. Firms should firstmapmaintenanceactivitiesinalogicalareaandthenevaluateeachoftheseactivities criticallyoneffectivenessrequiredandriskinvolvedinoutsourcing.Oncetheactivitytobe outsourcedisestablished,thenextstepistodocumentapropermaintenanceoutsourcing plan.Itisalsoimportanttoevaluatetheoutsourcerbasedontheskillsandknowledge requiredforthatactivity.Havingidentifiedtheoutsourcer,asuitablemaintenanceoutsourcing contractistobeagreeduponandtheneffortsaretobemadeforsmoothhandoverofthe contract.Thisframeworkisappliedtoaglassmanufacturingfirmwhichiscontemplating outsourcingmaintenanceactivities. 38 IMR Conference 2006
COMPETITIVE STRATEGIES FOR OUTSOURCING IN HEALTHCARE INDUSTRY BalaKrishnamoorthy, Professor-BusinessPolicy,NarseeMonjeeInstitute of Management Studies (NMIMS)-Deemed University, Mumbai. Ph: 91-22-25568062, balark1@rediffmail.com Varun Nagalia, MBA II Student, NMIMS-Deemed University, Mumbai. Ph: 9198207 20383, varun_nagalia@rediffmail.com Inthepast,outsourcinghasbeenusedtacticallyasarapidandoftenshort-termsolution toaparticularneedorproblem.Theadoptionofastrategicperspectiveonoutsourcingis today regarded as one of the most useful and important business methodologies, giving organisationstheopportunitytoliberatetheirfullpotentialforprofitability,efficiencyand costeffectiveoperation,andallowingthemmaximumflexibilityintermsorretainingand broadeningtheircustomerfranchise.Adoptingthisstrategicapproachplaysakeyrolein theprivateandthepublicsectorsofmostoftheworld’sdevelopedcountries,andincreasingly in many developing ones. Thehealthcareindustryisgettingmoreandmorecompetitiveeveryday,whichhasledto anincreasinguseofoutsourcinginthesector.AccordingtoaMcKinseyreportthehealthcare marketisundertremendouspressurefromthreeforces: l Constrainedprofits:Thedecliningreimbursementsandincreasingcostscausinghospitals tooperateonrazorthinmargins. l Lowerservicemodels:Asdemandforservicesincreases,thebudgetandthemaintenance of adequate labour decrease leading to redefinition of acceptable and desirable qualitylevelsofservice. l Changingcustomerexpectations:Withincreasedavailabilityofinformation,expectations have increased multiple fold and there are greater options in terms of payment and servicelevels. Thispaperanalysesthedynamicchangesthathavetakenplaceinthedeliveryofhealth services, the changing demands and the changes in the outlook of healthcare delivery. Furtherthepaperlooksintothecontributionsofstrategicoutsourcingtomakehealthcare deliverycompetitive.Thepaperfocusesononesectionofthehealthcareoutsourcingmarket, namely,theproviders,inidentifyingstrategicoutsourcingpracticesintheindustryin generalandinselectleadinghospitals. IMR Conference 2006 39
OUTSOURCING 3PL SERVICES: A MEASUREMENT OF INDIAN CORPORATE MINDSET DKAgrawal,AssociateProfessorandChairperson,MarketingArea,Fore School of Management, New Delhi. Ph: 9810627581, agrawal_dk2001@yahoo.com SangeetaChhabra,AssociateProfessor,EconomicsandOutsourcing,Lal BahadurShastriInstituteofManagement. chhabrasangeeta@yahoo.co.in Thereisagrowingawarenessaboutthestrategicroleoflogisticsservicesinthefirm’s overallsuccess.Businesseshavemovedbeyondviewinglogisticsasmerelyanareaforcost improvementtoviewingitasakeysourceofcompetitiveadvantagewithinafirm’stotal marketefforts.Customerservicehasbeenakeyfocalareaofresearchinthelogistics disciplineandtheliteratureinthearearevealsthatlogisticalservicecapabilitiescanbe leveragedtocreatecustomerandsuppliervaluethroughserviceperformance;enablemass customisation;createeffectivecustomerresponse-basedsystems;positivelyaffectcustomer satisfactionand,inturn,corporateperformance;provideadifferentiatingcompetitive advantage; and segment customers. Anecdotalevidencefindsamultibillion-dollarthird-partylogistics(3PL)industrydedicated toimprovingmanufacturers’logisticsservices.Mostfirmsindevelopedcountrieshavebeen outsourcing3PLservices.ThesizeoftheIndianmarketisimpressiveonaccountofits geographicalspread.Inrevenueterms,ithasbeenassessedatRs16,000croresbysome sourcesandRs3000croresbyothers.InGDPterms,itisfoundthatthetotallogistics spend in India is about 13% of the GDP which comes to about Rs. 3.58 lakh crore. The outsourcedportionisestimatedtobearound1.2lakhcrore. The growth of the 3PL industry in India is relatively low when compared with that of developedcountriesduetothepoorcorporatemindsettowardsoutsourcingof3PLservices. Companiesstillpreferthetraditionalfragmentedwayofmanagingshipment,warehousing, inventorymanagementandorderprocessingandfulfilment.Ontheotherhand,3PLisall aboutanintegratedapproachfortotallogisticalsolutionsensuringsuperiorcustomerservice. Buttheoldmindsetmaybeinducedbythelackofinvestmentsandscale,lackoffinancial support,lowawarenessandthehighoperationalcosts. Inthisempiricalresearch,anattemptismadetomeasurethemindsetofcorporateenterprises towards adaptation of 3PL along with their requirements and apprehensions. The survey revealedthatlogisticsheadsoffirmsstillemphasisecostreductionandgenerallyoverlook thelong-termimpactoncustomersatisfaction. 40 IMR Conference 2006
DIFFERENCES IN SERVICE QUALITY BETWEEN DEVELOPED AND DEVELOPING COUNTRIES: HOW DEVELOPING COUNTRIES CAN IMPROVE THEIR COMPETITIVENESS IN THE OUTSOURCING OF SERVICES Naresh K Malhotra, Regents’ Professor, College of Management, Georgia InstituteofTechnology. Naresh.Malhotra@mgt.gatech.edu JamesAgarwal,AssociateProfessorandCoordinatorofMarketing,University ofCalgary,Canada. james.agarwal@haskayne.ucalgary.ca Francis M Ulgado, Associate Professor, College of Management, Georgia InstituteofTechnology. francis.ulgado@mgt.gatech.edu GShainesh,AssociateProfessor,Marketing,IndianInstituteofManagement Bangalore. shaineshg@iimb.ernet.in Servicesaccountforalmosttwo-thirdsoftheworld’stotaloutput.Tradeinservicesis growingfasterthaninotherareasandaccountsforonefifthofworldtrade. Exportsin commercialservicesarenowgrowingfasterthanexportsinmerchandisegoods. Currently, they account for more than 20% of the volume of merchandise trade. Evaluationofservicequalitybecomesdifficultduetothreecharacteristicsthatareinherent inservices—intangibility,heterogeneity,andinseparability.However,Parasuraman,etal. proposed a framework consisting of ten determinants or dimensions of service quality: reliability,access,understandingthecustomer,responsiveness,competence,courtesy, communication,credibility,security,andtangibleconsiderations. Malhotraetal.used thesedimensionsasabasisforacomparativeevaluationofthedeterminantsofservice qualitybetweendevelopedanddevelopingcountries. Thispaperextendsthegeneralframeworkforservicequalityandcorrespondinghypotheses developedbyMalhotraetal.whichcomparativelyevaluatestendimensionsofservicequality between developed and developing countries, to develop a framework for evaluating the competitiveness in the outsourcing of services. It draws several implications on how developingcountriescanimprovetheirglobalcompetitivenessintheoutsourcingofservices. IMR Conference 2006 41
MEXICAN MAQUILAS AND INDIAN BPOS: A CRITICAL COMPARISON VanVMiller, PrincipalResearcher,Human&EcologicalResources,Los Ojos,NM,USA. Ph: 513-868-2278, Fax: 513-868-0702, vvmiller@fuse.net AnandaMukherji, AssociateProfessorofManagement,Dept.ofManagement, MarketingandInternationalBusiness,CollegeofBusinessAdministration, TexasA&MInternationalUniversity,USA. Ph: 956-326-2526, Fax: 956-326-2494, max@tamiu.edu In November 1965, the Mexican government decided to initiate an industrialisation programme that was out-of-step with its stated policies and activities for economic development.TheprogrammeallowedMexicanmanufacturingplantstoimportrawmaterials fromtheUnitedStates,assemblethemintofinishedgoods,andthenre-exportthosegoods backtotheUnitedStates.Afterafewyears,thisearlyoutsourcingeffortformanufactured goods became known as the Mexican Maquiladora Programme (MMP), which flourished until 2001whenitexperiencedaseriousdownturn.Today,ithasonlypartiallyrecoveredbut appears to have stabilised, leading many to conclude that the programme has been a success.ButthenumbersrevealverylittleabouttheMMP’simpactupondevelopment,the primaryeconomicgoaloftheMexicannation. ThispapercomparesandcontrastsMexico’smaquiladorasectorwithIndia’sBPOsector— outsourcingforservices.Inbothcountries,thestatedoverarchingprincipleforeconomic developmentduringthelatterhalfofthetwentiethcenturywasautarkyuntilmajorcrises forcedapolicyreversal(1986inMexicoand1991inIndia)uponeachnation.Giventhese contextualsimilaritiesandtheforty-yearhistoryoftheMMP,ourmajortaskinthisproposed paper is to examine the economic development outcomes of the MMP and then to apply that knowledgetoIndia’sBPOsinanattemptto‘see’ifthelatterisbetterpositionedasadriver of economic development. Toundertakethisanalyticaltask,weuseconceptsfrominstitutionaltheoryanddatafrom multiple sources. Economic development is operationalised in standard terms as labour turnoverandverticaleconomiclinkages.Byapplyingtheinstitutionalideasofrules,routines, andtransactioncosts,weareabletoexplainthedevelopmentalshortcomingsoftheMMP incertaintypesofmaquiladoraoperationsandtopredictsimilaroutcomesinIndianBPOs withthesametypesofoperations.However,amajorcaveattothispredictionistheobserved differenceintherules-routinesnexusforeachofthecountries.Theimportanceofthis nexusforeconomicdevelopmentisfundamentaltoouranalysis.Thedataforthisproject come from a stratified, random sample of maquiladoras in eight Mexican cities, Mexican governmentreports,andinformationinthepublicdomainforIndianBPOs. 42 IMR Conference 2006
UNDERSTANDING URBAN TO RURAL OUTSOURCING IN INDIA: BASIS AND POTENTIAL Manoj T Thomas, Fellow student, Institute of Rural Management (IRMA), Anand. Ph: 09426523746, manojtthomas@gmail.com This paper attempts to understand the phenomenon of urban to rural outsourcing, whose potential has now begun to emerge, due to the changes in the technology and market environment. Hitherto, urban to rural outsourcing has not been focussed upon, and even the issue of urban-rural linkages has not been properly understood. At the same time, ‘offshoring’hasbroughtouttheadvantagesofexploitinggeographicaldifferencesincosts andcapabilities.Thoughsubcontractinghastraditionallybeenbetweenurbanfirmsdueto easeinensuringqualityandmanagingeffectivecoordination,theadventofnewinformation technologieshasthepotentialtochangethis.Drawingonthelargertheoriesofoutsourcing, thepapertriestounderstandhowthesecanbeapplicableforurbantoruraloutsourcing, and at the same time understand how this process is different owing to the rural-urban characteristics. The paper attempts this in three ways. First it tries to understand the differences in characteristicsbetweenruralandurbanIndiatoconsidertheservicesthatcanbeoutsourced. This includes an idea of the differences in demographic and natural resources and the differencesincostsofotherfactors.Thetraditionalinteractionbetweenurbanandrural has been characterised by movement of labour and agricultural and natural resource commodities from rural to urban, and movement of produced goods from urban to rural areas.Thepapertriestoanalysethetechnologiesthathavethepotentialtoremoveblocks tosustainedruralurbaninteractions. Thepaperexploresissuesliketheconstraintsonurban-ruraloutsourcing,theimpactof urban-ruraloutsourcingonproduction,andissuessuchasmigration;andthepotential quantum or extent of this phenomenon. The paper also discusses the changing role of agentsandtheimportanceofruralinfrastructureforfacilitatingurban-ruraloutsourcing. IMR Conference 2006 43
IDENTIFICATION TOWARDS CLIENTS BY EMPLOYEES OF OUTSOURCING SERVICE PROVIDERS PrarthanBDesai,FellowStudent(OB-HRM),IndianInstituteofManagement Bangalore. Ph: 0-93425 62485, prarthanb02@iimb.ernet.in. Employeesworkinginanoutsourcingserviceproviderorganisationareformallypartofthe employingorganisation.However,theyspendasignificantpartoftheirdailyworklife handlingtheoutsourcedbusinessprocessesofclientorganisations.Theyareexposedto theorganisationalroutines,culture,andperformanceappraisalandrewardcriteriaofboth organisations and therefore they may exhibit dual organisational identification — one towardstheiremployingorganisationandtheothertowardstheirclientorganisations. Organisationalidentificationreferstoemployees’perceptionofbelongingnesstotheir organisation.Itisimportanttounderstandemployees’organisationalidentificationbecause it can influence important individual outcomes, such as psychological well-being of employees, and organisational level outcomes, such as cooperation among employees and organisationalcitizenshipbehaviour. This conceptual paper attempts to answer two research questions: (1) What are the antecedentsspecifictotheoutsourcedbusinessprocessthatinfluencesalienceofemployee identificationtowardstheclient?(2)Whatfactorswoulddeterminewhetheremployees’ identificationtowardtheclientisinconflictorincongruencewiththeiridentification towardstheemployingorganisation? Thepaperproposesthattherearecertainantecedentsspecifictotheoutsourcedbusiness process, which influence the salience of employee identification towards the client organisation,thesebeing:(1)codifiabilityoftheknowledge,(2)amountofinteraction withthestakeholders(e.g.,suppliers,employees,orcustomers)oftheclient,and(3) amountofrelation-specificinvestmentsrequiredbytheemployingorganisation.Thepaper alsoproposesthattheemployees’identificationwiththeclientbeinginconflictorcongruence withtheiridentificationwiththeemployingorganisationisdeterminedbythedifference in:(1)organisationalcultureoftheclientandtheemployingorganisation,and(2)the forcesofinstitutionalisomorphismprevalentinthecountrywheretheclientislocatedand thecountrywheretheemployingorganisationislocated. 44 IMR Conference 2006
DEMOGRAPHIC COMPLEMENTARITIES AND OUTSOURCING: IMPLICATIONS FOR INDIA Amarendu Nandy, Research Scholar, Department of Economics, National UniversityofSingapore. amarendu@nus.edu.sg MukulGAsher,Professor,LKYSchoolofPublicPolicy,NationalUniversity ofSingapore. sppasher@nus.edu.sg ThispaperanalysestheimplicationsforIndiaofdifferingglobaldemographictrendsfor outsourcingandoffshoring.Italsobrieflynotestheimplicationsofdifferingdemographic trendsamongtheIndianstates.Thepaperarguesthatdemographiccomplimentarityprovides Indiawithaone-timeopportunityforthenexttwotothreedecadeswhichitmustutilise tosustainitsgrowthrateandoccupyallsegmentsofglobaloutsourcingandoffshoring activities.Indiahashadadegreeofsuccessintheseactivities.Ithoweverfacesinternal andexternalchallenges.WithappropriatepoliciesandfocusIndiacancontinuetomaintain itsshare,andhelpnurturegloballycompetitivecompanies. IMR Conference 2006 45
BPO AND THE EMPLOYMENT SCENARIO IN THE INDIAN ECONOMY GulnarSharma,Professor,JankideviBajajInstituteofManagement, SNDT Women’s University, Mumbai. drgulnarsharma@rediffmail.com Sanjay Kaptan, Professor, Department of Commerce, SNDT Women’s University,Mumbai. BusinessProcessOutsourcing(BPO)asaprudentbusinesspolicytosustaincompetitive advantageandgrowisnowagloballyacceptedfact.Thistrendtooutsourcecoversmany industriesandseveralorganisationalfunctions,andhasthecapacitytogeneratehuge employment.Ithasgeneratedemploymentattherateof13%sofarandislikelytogrowto 31%by2010.Differentfunctionsgeneratedifferentquantaofemployment,withthecustomer care operation generating the highest employment. The ITES sector employed 41,000 employees in 1999 and the figure is expected to reach 1,100,000 by 2008. Revenues from theindustry,whichstoodatRs20.30billionin1999,areexpectedtoreachRs.810billion by2008. While the BPO sector is fast developing and has tremendous employment potential, there aremanyfunctionalproblemssuchasthehighalterationrate,costcuttingtechniquesand alackofstabilityinthegenerationofemployment.Issueslikesecrecy,organisational commitment and dedication to a particular value system are surfacing. There is every possibilitythatintheyearstocometheseissuesmayturnouttobefunctionalproblems andmayaffecttheorganisationalqualityofwork,workcultureandindustrialclimate. ThispaperdealswithhowtheBPOindustrywillinfluencetheopportunitiesandchallenges in relation to the employment scenario in India, and also analyses the impact of BPO on employmentinIndia.Itattemptstoidentifyfactorsresponsiblefortheshiftinemployment patternanditsimpactonthesectoralchangesinemploymentpattern. 46 IMR Conference 2006
THE WELFARE IMPLICATIONS OF OUTSOURCING IN THE HOST COUNTRY Arti Grover Goswami, Delhi School of Economics, Ph: 91-11-27666703, Fax: 91-11-2766-7159, arti@econdse.org Foreigndirectinvestment(FDI)maynotnecessarilybethemostwelfareenhancingformof internationalinvestment.Thehostcountryhasamenuofoptionssuchasjointventure, technologylicensing,franchising,outsourcingetc.Ahostcountry’schoiceoforganisational form should depend on its growth and welfare effects. This paper compares the welfare effectsofFDIwiththatofoutsourcinginthehostcountry,usingtheGrossman-Helpman qualityladdersframework.Ifthehostcountry’sabsorptivecapacityisaboveagiventhreshold level,outsourcingismorewelfareenhancingvis-à-visFDI.Ontheotherhand,evenwith lowerthanthresholdabsorptivecapacity,outsourcingbeingwelfareimprovingascompared toFDIcannotberuledout.Animplicationofthisisthatinvestmentinhumancapitalpays off more when outsourcing is the chosen mode of organisation of fragmented production, ratherthanFDI. IMR Conference 2006 47
CO-LOCATION OF UNRELATED DIVISIONS: DYNAMICS OF VALUE CREATION AND DESTRUCTION SrinivasGunta,FellowStudent,IndianInstituteofManagement Bangalore. Ph: +91-80-26993014, Fax: +91-80-26584050, srinivasg01@iimb.ernet.in Outsourcinginserviceshasassumedtheroleofabusinessimperativewithinashortperiod oftenyears,especiallyinthecontextofoffshoringtocountriessuchasIndia.Costadvantages havegivenwaytoadvantagesintheareasofvalueadditionandstrategictransformationof businesses. The focus has shifted to ways and means of organising for superior service delivery–leadingtodecisionswithrespecttomode(offshoringvson-shoring),method (captiveprovidervsthird-partyprovider)andmeans(specialisedprovidervsfull-lineprovider). Mostoftheoutsourcingoutfitsareorganisedwithallthedivisionsco-located,especially initially.Managerially,thisenablesconcentrationofdirectauthorityforoverallsupervision; economically,itcutscostsduetopoolingofresourcesandbetterutilisationofcommon infrastructure.Thisistrueofcaptiveaswellasthirdpartyprovidersandspecialised(in termsoffocus)aswellasfull-lineproviders. Anoutsourcingoutfittypicallyhasdifferentactivitiesorganisedintovariousdivisionssuch assoftwaredevelopment,callcentresandtransactionprocessingcentres.Withinthisbroad schemaofclassification,severaldivisionsorsub-divisionsmaybeorganisedbasedonthe nature, periodicity and complexity of the work. This would obviously imply that the qualifications,skillsetsandtheoutlookoftheemployeeswoulddifferaswell.Considering thefactthattheadventofIThasenabled‘divisionofwork’toobviateco-location,itcan beassumedthatco-locationofdisparatedivisionslacksacompellingreason.Co-location insuchascenario,wherethedivisionsaredisparateandinter-divisionalemployeeslack theskillstoevaluateotherdivisionsortheiremployees,posesaninterestingproblemfor organisationtheorists. The comparative evaluations that the divisions attempt of one another can take several forms.Itcantaketheformofinter-divisionallearningthattakesofffromaninternal competitionperspective;itcantakeaformthatlendsitselftoinformalknowledgetransfer, andinextremesituations,itcantaketheformofdestructionofvalueattheorganisational levelwhilebeneficialatthedivisionallevel.Thispaperreviewsliteratureintheareasofco- locationandproductdevelopmentextensivelytodelineatethedynamicsofvaluecreation anddestruction.Itcomesupwithpropositionsonthesuitabilityofco-locatingvis-à-vis the modes, methods and means of outsourcing. 48 IMR Conference 2006
SouravMukherji, AsistantProfessor,OrganisationalBehaviourandHuman Resources Management, Indian Institute of Management Bangalore. Ph: 91-80-26993145, souravm@iimb.ernet.in Thephenomenonof‘outsourcing’hasstartedtodominatethepresentbusinesslandscape. Unlikeinthepastwhenorganisationswouldtypicallyoutsourcenon-coreactivitieslikethe frontofficeorsecurityservices,today’sorganisationsareoutsourcingactivitiesthatare criticaltotheirbusiness,suchasstrategyformulation,R&Dorhumanresourcemanagement. Seniormanagers,therefore,needtohaveatheoreticalfoundationonwhichtheycanbase theiroutsourcingdecisions.Inthispaper,Idrawupontransactioncoststheorytolaydown aframeworkforanalysinganyoutsourcingdecision.Whenorganisationsoutsource,theygo tothe‘market’forconductinganeconomicactivitythattheycouldhaveotherwiseconducted withina‘hierarchy’,i.e.,withintheboundaryoftheirorganisation.Sinceboththe‘market’ andthe‘hierarchy’havetheirownsetsofcostsandbenefits,anoutsourcingdecision,inits simplestform,isachoiceoftheoptionthathasabetterbenefit-to-costratio.Having establishedthetheoreticalbasis,Ilookatspecificexamplesofoutsourcingdecisions witnessedintheIndianindustry,suchasKingfisherAirlinesoutsourcinggroundhandling facilitiestoIndianAirlinesorThermaxoutsourcingtheirstrategyformulationtoMcKinsey, inordertoexplainthatorganisationstodayhavemultipleobjectivesbehindtheiroutsourcing decisions.Iidentifyfourcategoriesofsuchobjectives,namelycostminimisation,accessto privilegedassets,superiorresourceleverageandriskdiversification,whicharecollectively exhaustivebutnotmutuallyexclusive.Whileexplainingeachofthesecategories,Ienrich thetheoreticalframeworkproposedabovewithnotionsof‘knowledgespillover’and‘reputation capital’–variablesthathavesofarremainedabsentorimplicitindiscussionsonoutsourcing. I end this paper with an explanation of why outsourcing is a natural consequence of the informationageandhowinformationtechnologyiscreatingmarketconditionssuitablefor organisationstospecialise.Thispaperistheoreticalinnaturebutitdrawsextensivelyfrom examplesofoutsourcingintherealworldinordertoexplainandapplythetheory.Whenit comestooutsourcingdecisions,suchatheoreticalfoundationwouldenablethepractising managertomovebeyondsimplisticargumentslike‘coreversusnon-core’or‘converting capitalexpenditureintovariableexpenses’(bothofwhichareconsequencesratherthan causesforoutsourcing)andenablethemtodoathoroughanalysisoftheobjectivesand possibleconsequencesoftheiroutsourcingdecision. OUTSOURCING: PRACTICE IN SEARCH OF A THEORY IMR Conference 2006 49
OUTSOURCING OF HEALTHCARE SERVICES IN RAJASTHAN: AN EXPLORATORY STUDY GyanPrakash, AssistantProfessor,SchoolofManagementSciences, TezpurCentralUniversity,Assam. Ph: 03712-267007 ext. 5013, gp@tezu.ernet.in Avantika Singh, Lecturer, Department of Policy Studies, TERI School of AdvancedStudies,NewDelhi.avantika@teri.res.in Outsourcingtodayhasemergedasoneoftheseveralresponsestocorrecttheanomaliesin publicprovisionofhealthcare,sharetheresponsibilityandincreasethepenetrationof healthcareservices.Thispaperistheoutcomeofanexploratorystudyonoutsourcinginthe DirectorateofMedicalandHealthServices(DMHS),GovernmentofRajasthan.Theobjectives ofthisstudyaretounderstandtherationaleforoutsourcing,theinstitutionalarrangements foroutsourcing,contractdesignanditdealswithsomeoftheexperiencesofimplementation. ThestudyrevealsthatDMHSisoutsourcingbothancillaryandclinicalservices(preventive andcurative).Ancillaryservicesaretangible,makingiteasiertodefinetheproductand monitorperformance.However,definingtheproductismoredifficultandcostsofenforcing thecontractarequitehighincaseofpreventiveandcurativehealthcare.Organisational restructuringthroughagencificationandformationofRajasthanMedicalReliefSocieties has lent the government autonomy and flexibility, and created formal mechanisms for garneringtheparticipationofPPsandNGOsinthedeliveryofhealthcareservices.Though outsourcing has been going on for some time now, the government is yet to lay down a regulatory framework. Such a framework would serve to minimise uncertainties and lay down an incentive structure. There is a need for economic regulation that promotes competitionandatthesametimepreventsadverseoutcomessuchasescalationofcosts, exploitationandinequity.Sinceservicedeliveryoccursintheprocessofinteractionbetween clientandprovider,thereisaneedforasystemofqualitymeasurement. A persistent concern with outsourcing is how it will affect the access of marginalised groupstohealthcare.Withtheinvolvementoftheprivatesector,‘choices’haveimproved. However,thepoormaybeseverelylimitedintheircapacitytoaccesstheseservicesbecause oftheirinabilitytopay.Thoughtheprivatesectorcancomplementthegovernment’sefforts andmaybeevendoitbetter,yetitcannotleadthehealthsectorinadirectionlikelyto maximise its contribution to the health of the population. Therefore, the state cannot relinquishitsresponsibilityofprovisionofhealthcaretoallinanequitablemanner.There islimitedevidenceontheefficiencyandequityimplicationsofcontracting.Thisstudy couldinfactserveasastartingpointforasystematicenquiry. IndexTerms:Contractingout,outsourcing,publichealth,regulation. 50 IMR Conference 2006
SOFTWARE PRODUCT DEVELOPMENT TRANSITION: MANAGERIAL IMPLICATIONS FROM A SUBSIDIARY PERSPECTIVE Vasanthi Srinivasan, Associate Professor, Organisational Behaviour and Human Resources Management, Indian Institute of Management Bangalore. Ph: +91-80-26993046, Fax: +91-80-26581602, vasanthi@iimb.ernet.in BineeshKumarP,Student,PostGraduateProgrammeinSoftwareEnterprise Management, Indian Institute of Management Bangalore. Manymultinationaltechnologycompanieshaveoffshoredproductdevelopmentactivities toIndia.Decisionsrelatedtothetransitionaredecidedbythetopmanagementlocatedat the headquarters in consultation with the senior management in India, taking into considerationthelong-termstrategicobjectivesoftheparentandthesubsidiary.Atransition decision is made and communicated and at this stage a project team is formed to manage thetransition.Sometransitionstendtobesuccessfulwhileothersdonot.Theobjectiveof thisstudywastounderstandthepre-requisitefactorsforasuccessfultransitionusinga groundedtheoryapproach.Fourprojecttransitionsinasinglemultinationalsubsidiary werestudied.Basedonthesefourcases,anattempthasbeenmadetoidentifythefactors thatarecriticalforsuccessfultransition.Thelifestageoftheproduct/project,the composition of the existing team/new team, organisational motives for the transition, perceivedandactualmanagementsupport,andcommunicationemergedasthefivefactors whichappeartosignificantlyinfluencethesuccessorfailureofatransition. IMR Conference 2006 51
REVERSE OUTSOURCING THROUGH HYBRID SOURCING™ AND ITS EFFECT ON THE GLOBAL DELIVERY MODEL Abhishek Amal Sanyal, Software Quality Advisor, Software Engineering PerformanceGroup,HSBCGlobalTechnologyLtd.,Pune. Ph: 91-20-56037299, abhishekamalsanyal@hsbc.co.in IT companies across the world, according to the norm, are going in for Global Delivery Models (GDM) of outsourcing which aim at cost-effective IT system development and deployment,andconsequentlyhaveputupdevelopmentcentresinlow-cost,distant-shore locationslikeIndia,China,Philippines,etc. Reverse Outsourcing through Hybrid Sourcing™ is the brainchild of three American IT entrepreneurswhoclaimtobe‘bringingoutsourcingcloser’toAmericanshores.Intheir scheme,theyplantoanchoracruiseshipjustoutsidetheterritorialwatersoftheUSA,so as to bypass the stringent Worker Laws and the need of H1B visas. This ship will be the living-and-workingareaofabout600IndianandRussiansoftwareengineerswhowillwork at three times the salary they receive at home but 1/3 of the salary that would go to an AmericandeveloperontheAmericanmainland.Consequently,thecoreandalliedoutsourced jobswouldflowbacktoAmericaresultinginreverseoutsourcing.However,itwouldstill leveragethetangibleandallimportantbenefitofreducedoverallcostsfortheclient organisationandtheintangiblebutequallyimportantbenefitsofdatasecurity,client- serviceproviderinteraction,publicopinion,local-job-creation,etc. WithHybridSourcing™claimingtobefunnelling90%ofitsrevenuebacktotheAmerican mainlandbutstillprovidingthesamelow-costandgoodqualitycombination,itisbuta matteroftimethatReverseOutsourcingfindsitsfeetinthequicksandoftheglobaleconomy. Insuchasituation,wheredoestheaveragesoftwareengineerondistant-shoresfindhimself? Theauthorplanstoanalysethetwosystemsvis-à-visthefollowingfactors– 1. Costofinitiationandsustainedoperation 2. Perceivedclientbenefitsandlosses 3. Inherentadvantages,limitationsandoutrightdrawbacks 4. Legalandmoralissues 5. Impactondistant-shorejobs FortheReverseOutsourcingmodel,theauthorlooksat Hybrid-Sourcing™beingofferedby SeaCodeLtd.,SanDiego,USAwhile,forthetraditionaloutsourcingmodel,theGDMofan IndianITServiceCompanyinthesamesphereofbusinessandoperatinginIndiaisexamined. 52 IMR Conference 2006
MANAGING STRATEGIC CHANGE THROUGH OUTSOURCING IN LOGISTICS COMPANIES: A SWEDISH PERSPECTIVE SajalKabiraj,PhDStudent,ABV-IndianInstituteofInformationTechnology and Management, Gwalior/ Product Manager - Analytics, Datamatics Inc., Sweden. skabiraj@rediffmail.com; kabiraj@vsnlnet DPAgrawal,Member,UnionPublicServiceCommission,Govt.ofIndia,Delhi. Ph: 011-24670835, prof_dpa@rediffmail.com; agarwaldp@yahoo.com DeepaliSingh,AsstistantProfessor,ABV-IndianInstituteofInformation Technology and Management, Gwalior. Ph: 0751-2449803, Fax: 0751-2449808, deepalipsingh@gmail.com; dr_deepali@iiitm.ac.in Swedishlogisticscompaniesarefacingintensecompetitionwithbusinessesandlongterm clientsmovingtolowcostdestinations.Thoughthismaybeattributedtotheoutsourcing phenomenon,thispaperlooksatevolvingabusinessmodeltocontrolandlimittheflowof customers through the Strategic Change Management process. The term strategic change, asitisusedinthestrategicmanagementliterature,mainlyreferstothedevelopmentand renewalofcorporatestrategiesinanenvironmentalcontextofexternalpressuresandthreats. A need for such change is recognised when past experience, knowledge and competence no longerfitthecircumstancesoftheexternalenvironment.Thisforcesmanagerstoshiftfrom existingcompetenciestoexperimentationwithnewskillsandtheexplorationofmarket opportunities. When strategic change is on the agenda, the organisation is forced to internalisenewinformationaspartoftheorganisationalknowledgebase,developingnew knowledge and competence. Theauthorsdiscusstwocases,SchenkerLogisticsandDeutschePostNetWorldwide(better knownasDHLWorldwideExpress)basedinJonkoping(Sweden),throughpersonalinterviews conductedwith30managers,forgaininganunderstandingofthekindofchallengestopmanagers faceinaturbulentenvironmentwhentryingtoalignstrategicintentandstrategicactionfor supplychainmanagement.Thecasesalsoaffordinsightsintohowstrategicchangecanbe managedandwhatmanagerscandotorecogniseandhandle‘strategicdissonance’forensuring ‘success’inthechangeprocesswhileoutsourcing. Thiscouldthrowlightonthetheoreticaland practicalframeworks,criticisingtheconceptof ‘fit’ anditsunderlyingdualisticassumptions aboutstrategyandstructure,organisationandenvironment,andstrategicintentandstrategic action.Thepaperanalyseshowtheroleofsupplychainmanagementandtheuseofsupplychain management competence change when outsourcing. The study indicates that supply chain managementcompetenceisofsignificantimportancenotonlyforefficientlogisticsprocess management,butalsofornewproductdesignandprocurement,regardlessoftheextentof outsourcing.Thedifferentwaysofintegratingsupplychainmanagementwithvariousfunctions andprocessesbothwithintheorganisationandwithsuppliersarediscussed. Keywords:SupplyChainManagementStrategy,StrategicChange,Outsourcing,BusinessModel IMR Conference 2006 53
INDIA INC’S CLAIM TO THE INTERNATIONAL DISPUTE RESOLUTION MARKET Aakash Prasad and Vivek Rathore, National Academy of Legal Studies and Research,Hyderabad. In the present era of global commerce, the employment of efficient legal and dispute resolutionservicesbecomescrucialasinterfacewithlawisimperativeatalllevelsoftrade, bothnationalandinternational.Furtherinthisageofglobalisation,legalservicesare becomingglobal,thusallowinglegalprofessionalstotranscendbordersandbecomepartof aninternationalworkforce.Thispaperaddressesthechangingtrendsinthecontextof legalservicesandoutsourcing. Thepaperlooksatwhyitmakessensetooutsourcelegalservices.Primarilythreeaspectsof outsourcingarecovered:Firstly,outsourcingtheprocesspartoflegalservicesi.e.the growingareaofLegalProcessOutsourcing(LPO)andtheopportunitiesitcanofferIndia. Secondly,abriefanalysisoftheIndianlegalsystem,withreferencetoitscounterparts namelyChina,theUSandtheUK,andtheopportunitiesitoffersforoutsourcing.Thirdly,a studyofthepresentIndianlegalscenarioandareasforreform,andtheIndianclaiminthe AlternativeDisputeResolution(ADR)market.Thepaperalsooffersacasestudyofasector thatgivesimmenseinsightintothemajordebatessurroundingoutsourcingandthefactors whichactuallyenhancecompetitivenessthroughoutsourcing. 54 IMR Conference 2006
D.K.Agrawal Fore School of Management, New Delhi D.P.Agrawal Member,UnionPublicServiceCommission, Govt.ofIndia,Delhi James Agarwal UniversityofCalgary,Canada SrinivasAinavolu IndianInstituteofManagement,Calcutta MukulG.Asher NationalUniversityofSingapore ArindamBanerrji MD & COO, Deutsche Bank Operations International B.R.Bhardwaj BharatiVidyapeethInstituteofManagement andResearch,NewDelhi Ravan Boddu CEO,iSoftIndia Rupa Chanda IndianInstituteofManagementBangalore AbhijitChaudhary BryantUniversity,RhodeIsland Amitabh Chaudhry ManagingDirector&CEO,ProgeonLtd. Sangeetha Chhabra LalBahadurShastriInstituteofManagement SanjayChoudhari NationalInstituteofConstruction Management and Research, Pune Paramita Deb Gupta IndianCouncilforResearchonInternational EconomicRelations PrarthanBDesai IndianInstituteofManagementBangalore L.S.Ganesh IndianInstituteofTechnology,Madras AshutoshGarg NationalInstituteofConstruction Management and Research, Pune SuveeraGill UniversityBusinessSchool,PanjabUniversity ArtiGroverGoswami DelhiSchoolofEconomics Name Institution LIST OF SPEAKERS IMR Conference 2006 55
Name Institution LIST OF SPEAKERS KalyanKGuin IndianInstituteofTechnology,Kharagpur SrinivasGunta IndianInstituteofManagementBangalore Anoop Hegde CountryManager,FirstIndianCorporation T.J.Joseph ICFAIInstituteforManagement Teachers(IIMT),Hyderabad SajalKabiraj ABVIndianInstituteofInformation Technology and Management, Gwalior SanjayKaptan SNDT Women’s University, Mumbai BalaKrishnamoorthy Narsee Monjee Institute of Management Studies,Mumbai GopalKrishnan Founder,ChairmanandManagingDirectorof NinestarsInformationTechnologiesLimited Bineesh Kumar P IndianInstituteofManagementBangalore T.K.Kurien CEO, Wipro BPO NareshKMalhotra GeorgiaInstituteofTechnology K. Manasa WiproTechnologies,Bangalore Naveen Marimuthu MindtreeConsulting,Bangalore VanV.Miller HumanandEcologicalResources,LosOjos,USA K. Momaya IndianInstituteofTechnology,Delhi ArpitaMukherjee IndianCouncilforResearchonInternational EconomicRelations PradeepMukherjee Tholons,AsiaPacificHQ,Bangalore Ananda Mukherji TexasA&MInternationalUniversity,USA JyotsnaMukherji TexasA&MInternationalUniversity,USA SouravMukherji IndianInstituteofManagementBangalore 56 IMR Conference 2006
Name Institution LIST OF SPEAKERS Venkata Reddy Muppani IndianInstituteofTechnology,Bombay C.S.Murali VP,CorporateInitiatives,Cognizant TechnologySolutions VarunNagalia Narsee Monjee Institute of Management Studies,Mumbai PriyanRNaik LarsonandToubroLimited Amarendu Nandy NationalUniversityofSingapore Jogendra Kumar Nayak IndianInstituteofTechnology,Kharagpur PeterDOrbergJensen Copenhagen Business School, Denmark JasonMPattit SnyderCentreforInnovationManagement, SyracuseUniversity GyanPrakash SchoolofManagementScience,Tezpur CentralUniversity,Assam AkashPrasad NALSARUniversityofLaw,Hyderabad Arunabh Prasad Gupta NationalInstituteofConstruction Management and Research, Pune Shameen Prashantham UniversityofStrathclyde,UnitedKingdom Nadathur S Raghavan Co-founder,InfosysTechnologiesand Nadathur Investments and Holdings S.P.Raj CornellUniversity,Ithaca,NY U.SrinivasRangan BabsonCollege,USA Vikram Rao Pesident,MaduraGarments VivekRathore NALSARUniversityofLaw,Hyderabad Sanjoy Roy Choudhary AssistantVicePresident,Evalueserve Abhishek Amal Sanyal HSBCGlobalTechnologyLtd.,Pune IMR Conference 2006 57
Name Institution Peter Schumacher PresidentandCEO,ValueLeadershipGroup RahulSen RegionalEconomicStudies,ISEAS, Singapore G.Shainesh IndianInstituteofManagementBangalore Gulnar Sharma JankideviBajajInstituteofManangement, Mumbai Sandhya Shekhar IndianInstituteofTechnology,Madras JoeSigelman Co-President,OfficeTiger AvantikaSingh TERISchoolofAdvancedStudies,NewDelhi DeepaliSingh ABVIndianInstituteofInformation Technology and Management, Gwalior Gautam Sinha IndianInstituteofTechnology,Kharagpur VasanthiSrinivasan Indian InstituteofManagementBangalore KailashBLSrivastava IndianInstituteofTechnology,Kharagpur SadhanaSrivastava NationalUniversityofSingapore Sushil IndianInstituteofTechnology,Delhi Manoj T. Thomas Institute of Rural Management Anand FrancisM.Ulgado GeorgiaInstituteofTechnology RajanVaradarajan TexasA&MUniversity,USA NishantVerma Tholons,AsiaPacificHQ,Bangalore David Wilemon SnyderCentreforInnovationManagement, SyracuseUniversity LIST OF SPEAKERS 58 IMR Conference 2006
IIMB Management Review (IMR) is a premier management journal in India that presents researchandideasinthefieldofmanagementinareaderfriendlyformattomanagement practitioners and educators. Articles published in IMR are conceptually sound and methodologicallyrigorous,withthepotentialtoadvancemanagementtheoryandpractice andconsequentlyhavealongshelflife.IMRalsocarriesarangeoffeatureswhichgivesthe journalitsuniquepositioning. Aftermorethan15yearsofpublication,IMRhasachievedadistinctivepositioningfor itselfbothinthequalityofitscontentanditsreadership.IMR’sestimatedreadershipof 30,000 – 35,000 includes the ‘Who’s Who’ of Indian business – the top management of reputedbusinessfirmsinthecountry,managementconsultants,academicsandstudentsin reputedbusinessschoolsinIndia. FeaturesofIMR Noothermanagementjournalinthecountrycurrentlyofferssuchawideandbalancedset offeatures: l TheInterviewseekstoelicitfrombusinessleaders,uniqueandsuccessfulpractices thatadvancethepracticeofmanagement.TheInterviewbringsoutcriticallearnings andconceptualimplicationsforawideaudience. l The Round Table brings together academics, policy makers and leaders from industry who brainstorm on critical issues and extract multi-dimensional perspectives from chosen themes. l Articles that extend knowledge of the subject through empirical work or by building onexistingtheory,anddrawouttheimplicationsofresearchforpractitioners.All articlesgothroughadoubleblindrefereeingprocess. l Management Educators’ Forum, that explores issues germane to management pedagogy, where educators share new approaches and methods in terms of research, course content, teaching methods and teaching aids, and other issues that they considerrelevanttotheirfield. l A blend of other features, including book reviews that provide a window to new ideas in the world of management, and research in management and associated fieldsthatisontheanvil. IMR on CD IMRisavailableinelectronicformandtheCDversionofIMRcontainsthefulltextofthe editorialcontentofthejournalaspublishedintheprintedition(exceptadvertisements). Thisissoldtospecifiedsubscriberswithfullpermissiontodisseminatecontentstotheir students, employees and managers. ABOUT IIMB MANAGEMENT REVIEW IMR Conference 2006 59
IMREditorialAdvisoryBoard The editorial advisory board consists of reputed academics and management practitionersbothfromIndiaandabroad.ProfBMahadevan,(Chairperson),IndianInstitute ofManagementBangalore,ProfVRaviAnshuman,IndianInstituteofManagementBangalore, ProfMukulGAsher,NationalUniversityofSingapore,Singapore,ProfNBalasubramanian, Indian Institute of Management Bangalore, Prof Prashant Bordia, School of Management, UniversityofSouthAustralia,Australia,ProfRupaChanda,IndianInstituteofManagement Bangalore,ProfKChandrasekharan,NanyangTechnologicalUniversity,Singapore,ProfJayant RKale,GeorgiaStateUniversity,USA,DrVPKochikar,Infosys,Bangalore,ProfPraveenK Kopalle,AmosTuckSchoolofBusiness,Dartmouth,USA,ProfGopalNaik,IndianInstitute of Management Bangalore, Prof Abhoy K Ojha, Indian Institute of Management Bangalore, Prof J Ramachandran, Indian Institute of Management Bangalore, Prof S Ramesh Kumar, Indian Institute of Management Bangalore, Prof Sanjit Sengupta, San Francisco State University, USA, Prof K Sudhir, School of Management, Yale University, USA, Mr A D B Talwatte,ManagingPartner,Ernst&Young,SriLanka,ProfGerardJTellis,Universityof SouthernCalifornia,LosAngeles,USA,ProfRajanVaradarajan,TexasA&MUniversity,USA Prof V Venugopal, Nyenrode Business School, The Netherlands, Prof M J Xavier, Orfalea CollegeofBusiness,California,USA,Co-ordinator,StudentAffairs:MrSrinivasGunta,FPM, IndianInstituteofManagementBangalore Contact Us Forenquiriesregardingsubscription,advertisement,manuscriptsubmissionoranyother, pleasecontacttheIMRSecretariatatreview@iimb.ernet.inorwritetousat ABOUT IIMB MANAGEMENT REVIEW IIMB Management Review IndianInstituteofManagementBangalore, Bannerghatta Road, Bangalore 560 076. Ph: (91-80) 26993099 Fax: (91-80) 26584050 Website:www.iimb.ernet.in/review 60 IMR Conference 2006
Indian Institute of Management Bangalore IIMB Reception 2658 2450 - 54 IIMB MDC – Reception 3295 / 3443 / 3444 IIMB Management Review Secretariat/IMRCSecretariat 3099 / 2699 3059, 2658 9917 CentralPergola 3237 Class Rooms (M11, M12 & M13) 3027 ComputerCentre 3067 / 3071 / 3072 HealthCentre 3066 IIMB MDC Laundry Service 3320 AthicaDepartmentalStores 3033 IMRCOrganisingChair Prof.BMahadevan, E Block Ground, Room No.12 3466, 2658 9917 IMRCLogistics Ms.K.R.Usha, E Block Ground, Room No.7 3464 Ms.HariniSrinivasan, E Block Ground,Room No.11 3153 Mr.SrinivasGunta 93413 33748 (Mobile) Ms.G.Shashikala, E Block Ground, Room No.10 3099 / 9880220118 (Mobile) Mrs.PriyaVasu E Block Ground,Room No.10 3099 / 9342550070 (Mobile) IMPORTANT TELEPHONE NUMBERS* *ToaccessanyoftheIIMBnumbersfromoutsidetheInstitute’sEPABXsystem,please prefix2699totheextensionnumber. INDIAN INSTITUTE OF MANAGEMENT BANGALORE IMR Conference 2006 61
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IMRC 2006 Final

  • 1.
    Gl bal Competitiveness throughOutsourcing: Implications for Services & Manufacturing July 13 – 15, 2006 l IIM Bangalore Sponsors PLATINUM GOLD SILVER
  • 3.
    ABOUT THE CONFERENCE Outsourcinginboththemanufacturingandtheservicesectorshashadalonghistory.What ismorerecent,however,istheglobalisationofoutsourcing.Awiderangeofactivitiesin manufacturingandservicesisbecomingincreasinglytradableduetotechnology,theopening upofforeigndirectinvestments(FDI)andnewkindsoforganisationalarrangements.Further catalysingthisprocessaretherecentadvancesintheICTsector.Thesedevelopmentshave collectivelyresultedintheuseofoutsourcingasanimportantelementofcorporatestrategy inredefiningglobalcompetitiveness.Theyofferimmensepotentialforfirmstocreatenew value.TheemergenceofnewermarketsinrapidlydevelopingcountriessuchasIndiaand Chinahave enabled policy makers and firms to deploy these new mechanisms. Clearly,thisissuemeritsthegreaterattentionofbothresearchersandpractitioners.The IMRConferenceseekstofulfilthisneedbybringingtogether‘best-inclass’practitioners, educators and researchers in the field of management to share their knowledge on this importanttheme. Objectives l To provide a forum for management professionals and academics to meet and share theirknowledge l To identify and promote excellent research and writing talent among management academicsandpractitioners l To enable a large pool of management practitioners and educators to be informed by andbenefitfromkeyresearchfindingsinthefieldofmanagement UniqueFeaturesoftheConference Theuniquenessoftheproposedconferenceliesinthemannerinwhichpapersareselected forpresentation.TheunderlyingphilosophyoftheIMRConferenceistocarefullyselecta limitednumberofgoodqualityresearchpapersandprovidesufficienttimeforthespeakers’ presentationsandforaudienceinteraction.Therefore,paperpresentationintheconference ismainlybyinvitation.Whileauthorsmakepresentationsoftheirworkattheconference, delegates take part in the entire proceedings and have the opportunity to discuss the researchfindingswiththeauthorsandotherparticipants. StructureofSessionsintheConference Theconferenceseekstobalancetheperspectivesofbothpractitionersandresearcherson thethemeofOutsourcing. l There are 9 academic sessions in the conference that facilitate sharing of research issuesinOutsourcing.Duringthesesessions,37papersthatbringmulti-dimensional researchperspectivesontheconferencethemewillbepresented. IMR Conference 2006 1
  • 4.
    l Tocomplementtheacademicsessions,therearespecialsessionsorganisedtobringin practitionerperspectivestotheconferencethemes.Theseinclude: w Inaugurationby Shri N. S. Raghavan, Co-founder, Infosys Technologies and Nadathur Investments and Holdings. w CEO Symposium on ‘Beyond Cost Arbitrage: Emerging Paradigms for Sustaining Competitive Advantage in Outsourcing’, the participants being, Mr. Arindam Banerrji, MD & COO, Deutsche Bank Operations International, Mr. Amitabh Chaudhry, Managing Director & CEO, Progeon, Mr. T. K. Kurien, CEO, Wipro BPO, Mr.C.S.Murali,VPCorporateInitiatives,CognizantTechnologySolutions,and Mr.PeterSchumacher,Founder,President&CEO,ValueLeadershipGroup. w Plenary Sessions by Mr. Vikram D Rao, President, Madura Garments and Mr. Joe Sigelman,Co-President,OfficeTiger w PanelDiscussionon‘GlobalCompetitivenessthroughOutsourcing’,thepanellists being, Mr. Ravan Boddu, CEO iSoft India, Mr. Anil Kumar Chowdhary, COO, First Indian Corporation, Mr. Gopal Krishnan, CEO, Ninestars and Mr. Sanjoy Roy Choudhury,AssistantVicePresident,Evalueserve. ABOUT THE CONFERENCE 2 IMR Conference 2006
  • 5.
    ProgeonLtd. 26/3,26/4and26/6,ElectronicsCity Hosur Road, Bangalore- 560 100, India Tel : +91 80 2852 2405 Fax : +91 80 2852 2411 Url : www.progeon.com Wipro BPO Corporateoffice WiproTechnologies,DoddakannelliSarjapurRoad Bangalore - 560 035 Tel : +91 80 28440011 Fax : +91 80 28440256 Url : www.wipro.com Value Leadership Group Headquarters 107GrandStreet,6thFloor New York, NY 10013, USA Tel : +1 (917) 825 4007 Fax : +1 (212) 941 0442 Url :www.value-leadership.com IndianOffice PaharpurBusinessCentre NehruPlaceGreens New Delhi - 110 019, India Tel : +91 11 2620 7433 Fax : +91 11 2620 7606, 2620 7575 Cognizant Technology Solutions World Headquarters 500 Glenpointe Centre West Teaneck, NJ 07666 Tel : 201-801-0233 Fax : 201-801-0243 TollFree:1-888-937-3277 Url : www.cognizant.com Chennai 226 Cathedral Road Chennai-600086,India Tel : +91 44 28113063, 28116033 Fax : +91 44 28112622, 28112507 OfficeTiger An RR Donnelley Company 6thFl,SpencerPlaza,PhaseII 769 Anna Salai, Chennai - 600 002 Tel : +91 44 2849 8050 Fax : +91 44 2849 8053 Url :www.officetiger.com Ninestars Information Technologies Ltd. Corporate Office: Bangalore #37,KasturbaRoadCross,OffLavelleRoad, Bangalore-560001,Karnataka,India Tel : +91 80 22123881 / 2; 41121123 / 46 Fax : +91 80 22123881 / 2 E-mail:corporate@ninestar.co.in Url :www.ninestar.co.in IMR Conference 2006 3 Indian Institute of Management Bangalore Bannerghatta Road, Bangalore - 560 076, India Tel : +91 80 2658 2450 Fax : +91 80 2658 4050 Url :www.iimb.ernet.in SPONSORS
  • 6.
    CONFERENCE ADMINISTRATION 1. ProfessorPGApte,Director,IIMB(Chair) 2.ProfessorMukulAsher,NationalUniversityofSingapore 3. ProfessorJagadishBhagwati,ColumbiaUniversity 4. Mr. Pramod Bhasin, Genpact 5. Mr.KiranKarnik,Nasscom 6. Mr.PeterSchumacher,ValueLeadershipGroup 7. ProfessorRajanVaradarajan,TexasA&MUniversity 8. ProfessorGuyFitzgerald,BrunelUniversity 9. ProfessorLeslieWillcocks,UniversityofMelbourne 10.ProfessorRobertKennedy,UniversityofMichigan Advisory Committee 1. ProfessorRupaChanda,IIMB(Chair) 2. ProfessorAbhoyOjha,IIMB(Co-chair) 3. ProfessorB.Mahadevan,IIMB 4. ProfessorVVenugopal,NyenrodeBusinessSchool,TheNetherlands 5. Mr.SrikantKolhar,ResearchScholar,IIMB 6. Mr.AshutoshKumarSinha,ResearchScholar,IIMB 7. Ms.HariniSrinivasan,IIMB 8. Ms. K R Usha, IIMB Organising Committee 1. ProfessorB.Mahadevan,IIMB(Chair) 2. ProfessorRupaChanda,IIMB(Co-chair) 3. ProfessorSouravMukherjee,IIMB 4. ProfessorAbhoyOjha,IIMB 5. Dr.VPKochikar,Infosys 6. ProfessorYLRMoorthy,IIMB 7. ProfessorMuraliPatibandla,IIMB 8. Mr.SrikantKolhar,ResearchScholar,IIMB 9. Mr.SrinivasGunta,ResearchScholar,IIMB 10.Mr.SunilKumarSingh,ResearchScholar,IIMB 11.Ms. K R Usha, IIMB Academic Affairs Committee 4 IMR Conference 2006
  • 7.
    CONFERENCE ADMINISTRATION 1. Ms.KRUsha,IIMB(Chair) 2.Ms.HariniSrinivasan,IIMB(Co-chair) 3. Mr.SrikantKolhar,ResearchScholar,IIMB 4. Mr.MVMahesh,ResearchScholar,IIMB 5. Mr.AshutoshKumarSinha,ResearchScholar,IIMB 6. ProfessorB.Mahadevan,IIMB 7. ProfessorRupaChanda,IIMB 8. ProfessorGopalNaik,IIMB 9. Ms.GShashikala,IIMB 10.Ms.PriyaVivek,IIMB Conference Logistics Committee IMR Conference 2006 5
  • 8.
    Mr. Arindam Banerrji Mr.ArindamBanerrjiisChiefOperatingOfficer,DeutscheBankOperationsInternationalin BangaloreandMumbai.Priortothis,hewasDB’sRegionalCIOforIndia,responsibleforthe IndiaSmartsourcingInitiativeandtheGTOfunctions.ACharteredAccountant,hebeganhis careerintheShippingDivisionofLarsen&Toubro.HespentseveralyearswithJPMorgan invariouscapacitiesinFinance,TechnologyandOperations,andwasresponsibleforsetting uptheGlobalServiceCentreofJPMC. Mr.Ravan Boddu Mr. Ravan Boddu is CEO, iSOFT India, iSOFT being the largest healthcare IT company in Europe. He has a BE from REC, Allahabad, and an MTech in Computer Science from Osmania University,Hyderabad.Startinghiscareerin1987withUshaComputersinDelhi,heworked with KPMG in the UK, and WorldCom, Dell and HomeGrocer.com in the US before returning toIndiatosetupiSOFT’soperations. Mr. Amitabh Chaudhry Mr.AmitabhChaudhryisManagingDirector&CEOofProgeon,theBPOsubsidiaryofInfosys Technologies.Priortothis,hewasheadoftheinvestmentbankingfranchiseforSouthEast AsiaandstructuredthefinancepracticeforAsiaatCreditLyonnaisSecuritiesinSingapore.He holdsabachelor’sdegreeinengineeringfromtheBirlaInstituteofTechnology&Science, Pilani,andanMBAfromtheIndianInstituteofManagement,Ahmedabad. Mr. Anoop Hegde Mr.AnoopHegdeisCountryManager,FirstIndianCorporation,whichsupportstheoperational efficiencyandoffshoreinitiativeoftheFirstAmericanCorporationandoffersspecialised servicesinsoftwaredevelopment,testingandmaintenanceaswellastheITESspace.Prior to joining FIC in 2002, he was General Manager, VeriFone India. He has also worked in variouscapacitiesatWipro. HehasaBComfromSt.AloysiusCollege,Mangalore,andisa FellowoftheInstituteofCharteredAccountantsofIndia. Mr. Gopal Krishnan Mr.GopalKrishnan,isFounder,ChairmanandManagingDirectorofNinestarsInformation TechnologiesLimited,adigitisationcompanyprovidingstate-of-the-artarchivalsolutions todeliverdigitisedcontenttointernationallyrecognisedTier1newspapers.HeholdsaBSc fromLoyolaCollege,ChennaiandanMAinHumanResourcesfromtheUniversityofChennai. Hewasaparticipantinthe‘DrivingStrategicInnovation’programmeintheIMD/MITSloan SchoolofExecutiveEducation. Mr. T K Kurien Mr. T K Kurien is CEO of Wipro BPO which provides a broad range of services from CRM to industry-specificsolutions.HewaspartoftheWiproBPObusinessdrivingthetransaction processingbusinessinitiative.HewasearliertheCFOofWiproGEMedicalSystemsandCEO ofGEXRay. BIOGRAPHICAL SKETCH OF CHIEF GUESTS, PLENARY SPEAKERS AND PANELLISTS 6 IMR Conference 2006
  • 9.
    Mr.CSMurali Mr.CSMuraliisVicePresident,CorporateInitiatives,atCognizantTechnologySolutions, wherehedrivescorporateinitiativesinmarketingandorganisationaldevelopment.Priorto joiningCognizant,hewasapartneratConnectCapital,aventurecapitalfirmfocusedon softwareandBPOsectors.Asanindependentconsultant,hehasadvisedlargeUScorporations onITandBPOoutsourcingstrategies.HestartedhiscareeratTCSwherehespent15years invarioustechnical,salesandmanagementpositions. Mr. Nadathur SRaghavan Mr.NadathurSRaghavan,entrepreneurandphilanthropist,waspartofthefoundingteam ofInfosysTechnologiesandhasworkedinvariouscapacitiesinhis19yearsatInfosys.He retiredasJointMDin2000topursuehisvisionofpromotingentrepreneurshipandIndia- based global companies. To this end he co-founded Nadathur Holdings & Investments and helpedsetuptheNSRaghavanCentreforEntrepreneurialLearning(NSRCEL)atIIMBangalore. Inaddition,heactivelycontributestoactivitiesthataresociallyinclinedandholdsnon- executivepositionsinvariousorganisations. Mr. Vikram D Rao Mr.VikramDRaobeganhiscareerasaManagementTraineeinMaduraCoats.Hejoinedthe AVBirlaGroupin1999inhiscurrentpositionasGroupExecutivePresidentofFabricsand ApparelBusiness,GrasimIndustriesLimited,reportingtotheChairmanofAVBGroup.He wasawardedtheSuperAchieverAwardbytheIndiraGroupofInstitutes,PuneinOctober 2003. Mr. Sanjoy Roy Choudhury Mr.SanjoyRoyChoudhuryisanAssistantVicePresidentatEvalueserve,aglobalresearch servicesorganisationthatprovidesbusiness,marketandinvestmentresearch,dataanalytics andintellectualpropertyservicestoclientsaroundtheworld.Heiscurrentlymanagingthe operationsofthecompanyintheareaofinvestmentresearch.Heisactivelyinvolvedin campusrecruitmentaswellasnewinitiativesintheknowledgeprocessoutsourcingindustry. Mr. Peter Schumacher Mr. Peter Schumacher is Founder, President & CEO of the Value Leadership Group, an independentmanagementconsultingfirm.WithofficesintheUSA,Europe,andIndia,the ValueLeadershipGroupdevelopsglobalisationstrategiesforlargecompanies.Heholdsan MBAfromtheLeonardN.SternSchoolofBusinessatNewYorkUniversity. Mr. Joe Sigelman Mr.JoeSigelmanisCo-President,OfficeTiger.Priortoco-foundingOfficeTiger,heworked withGoldmanSachsInternationalinLondonintheInvestmentBankingDivisionfocusing onrealestate,serviceandhealthcareinvestmentsthroughoutEurope.AgraduateofPrinceton University’sWoodrowWilsonSchoolofPublicandInternationalAffairsandtheHarvard Business School, he began his career with Lazard Frères, New York. He is a recipient of BusinessWeek’sannualStarofAsiaAwards,2006. BIOGRAPHICAL SKETCH OF CHIEF GUESTS, PLENARY SPEAKERS AND PANELISTS IMR Conference 2006 7
  • 10.
    09:00-12:00 ArrivalofParticipants 12:00-14:00 ConferenceRegistration 14:00-16:30CURTAIN RAISER TO THE CONFERENCE – CEO SYMPOSIUM Beyond Cost Arbitrage: Emerging Paradigms for Sustaining Competitive Advantage in Outsourcing Mr.ArindamBanerrji,MD&COO,DeutscheBankOperationsInternational Mr.AmitabhChaudhry,ManagingDirector&CEO,ProgeonLtd. Mr.T.K.Kurien,CEO,WiproBPO Mr.C.S.Murali,VP,CorporateInitiatives,CognizantTechnologySolutions Mr.PeterSchumacher,Founder,President&CEO,ValueLeadershipGroup 17:00-19:00 ConferenceInauguration Shri Nadathur S Raghavan, Co-founder, Infosys Technologies and Nadathur Investments and Holdings 19:30-21:00 InauguralDinner 09:00-10:30 ParallelSessionA1 IS OUTSOURCING HERE TO STAY? SOME PERSPECTIVES 09:00-10:30 Parallel SessionA2 OPPORTUNITIES IN KNOWLEDGE-INTENSIVE DOMAINS 10:30-11:00 CoffeeBreak 11:00-13:00 ParallelSessionB1 SMEs AND OUTSOURCING 11:00-13:00 ParallelSessionB2 CHALLENGES IN OUTSOURCING 13:00-14:00 LunchBreak 14:00-16:00 ParallelSessionC1 TRADE AND INVESTMENT ISSUES 14:00-16:00 ParallelSessionC2 NICHE AVENUES FOR OUTSOURCING Thursday, July 13, 2006 DAY1 Friday,July14,2006 DAY2 SCHEDULE 8 IMR Conference 2006
  • 11.
    11:00-13:00 ParallelSessionC3 COMPARATIVE ASPECTSOF OUTSOURCING 16:00-16:30 CoffeeBreak 16:30-18:00 PlenarySession-1 Mr. Vikram Rao, Pesident, Madura Garments 19:00-22:00 CulturalProgrammebyPuthaliKalarangafollowedby ConferenceDinner 09:00-10:30 PlenarySession-2 Mr.JoeSigelman,Co-President,OfficeTiger 10:30-11:00 CoffeeBreak 11:00-13:00 ParallelSessionD1 IMPLICATIONS OF OUTSOURCING 11:00-13:00 ParallelSessionD2 ISSUES FROM SERVICE-PROVIDER INDUSTRIES 13:00-14:00 LunchBreak 14:00-15:30 PanelDiscussion: GLOBAL COMPETITIVENESS THROUGH OUTSOURCING Mr.RavanBoddu,CEO,iSoftIndia Mr.AnoopHegde,CountryManager,FirstIndianCorporation Mr. Gopal Krishnan, Founder, Chairman and Managing Director,NinestarsInformationTechnologiesLimited Mr.SanjoyRoyChoudhary,AssistantVicePresident, Evalueserve Note:Thefour parallelsessionsforpaperpresentationaredenotedasA, B,C&D inthetable SCHEDULE Saturday, July 15, 2006 DAY3 IMR Conference 2006 9
  • 12.
    09:00-12:00 ArrivalofParticipants 12:00-14:00 ConferenceRegistration 14:00-16:30CURTAIN RAISER TO THE CONFERENCE–CEO SYMPOSIUM Beyond Cost Arbitrage: Emerging Paradigms for Sustaining Competitive Advantage in Outsourcing Mr.ArindamBanerrji,MD&COO,DeutscheBankOperationsInternational Mr.AmitabhChaudhry,ManagingDirector&CEO,ProgeonLtd. Mr.T.K.Kurien,CEO,WiproBPO Mr.C.S.Murali,VP,CorporateInitiatives,CognizantTechnologySolutions Mr.PeterSchumacher,Founder,President&CEO,ValueLeadershipGroup 17:00-19:00 ConferenceInauguration ShriNadathurSRaghavan,Co-founder,InfosysTechnologies and Nadathur Investments and Holdings 19:30-21:00 InauguralDinner 09:00-10:30 ParallelSessionA1 IS OUTSOURCING HERE TO STAY? SOME PERSPECTIVES Thursday, December 16, 2004 DETAILED SCHEDULE Thursday, July 13, 2006 Friday,July14,2006 1.RajanVaradarajan,Texas A & M University, USA 2. Rupa Chanda, Indian InstituteofManagement Bangalore 3. Ananda Mukherji and Jyotsna Mukherji, Texas A & M InternationalUniversity,USA ComparativeAdvantage,Competitive Advantage,CompetitiveImperative andGlobalOutsourcing GlobalOutsourcingofServicesand DevelopmentinDeliveryCountries OutsourcingasaSelf-Correcting Phenomenon: A Gaia Hypothesis Perspective 10 IMR Conference 2006
  • 13.
    DETAILED SCHEDULE 09:00-10:30 ParallelSessionA2 OPPORTUNITIESIN KNOWLEDGE-INTENSIVE DOMAINS 1. Jason M Pattit1 , S.P. Raj2 and David Wilemon1 , Snyder Centre for Innovation Management1 ; CornellUniversity2 2. K.Momaya,IndianInstituteof Technology,Delhi 3. K. Manasa and Kailash B L Srivastava,WiproTechnologies, Bangalore;IndianInstituteof Technology,Kharagpur OutsourcingR&D:TheNextFrontier R&D / Knowledge Process Outsourcing from Japan: An UnexploredCompetitiveness Opportunity? BusinessProcessOutsourcing: Knowledge Management as a CompetitiveStrategy 10:30-11:00 CoffeeBreak 11:00-13:00 ParallelSessionB1 SMES AND OUTSOURCING 1. Pradeep Mukherjee1 , Abhijit Chaudhary2 and Nishant Verma1 Tholons,Bangalore1 ;Bryant University,RhodeIsland2 2. Shameen Prashantham and Naveen Marimuthu, University ofStrathclyde,UnitedKingdom; MindtreeConsulting,Bangalore 3. U. Srinivas Rangan and Peter Schumacher, Babson College, USA;ValueLeadershipGroup 4. Jogendra Nayak, Gautham Sinha and Kalyan K Guin, IndianInstituteofTechnology, Kharagpur BPO Adoption by Small and Medium Enterprises:AnInnovation-based Approach ShiftsinKnowledge-Intensityand SMEInternationalisation:Diversifying fromSoftwareServicestoProducts EntrepreneurialGlobalisation:Lessons fromtheExperiencesofEuropean SmallandMediumEnterprises ThePerceivedImpactofOutsourcing on Small and Medium Industries IMR Conference 2006 11
  • 14.
    DETAILED SCHEDULE Friday,July14,2006 1. SandhyaShekhar and L.S. Ganesh,IndianInstituteof Technology,Madras 2. SrinivasAinavolu,Indian InstituteofManagement, Calcutta 3.SuveeraGill,University BusinessSchool,Panjab University 4. B.R. Bhardwaj1 , Sushil2 and K. Momaya2 , Bharati Vidyapeeth Institute of Management and Research1 ;IndianInstituteof Technology,Delhi2 Benchmarking Knowledge Gaps for AssessingOutsourcingViability LeveragingOutsourcing–Performance ofandImplicationsforIndianIT ServicesIndustry OutsourcingandTransferPricing Challenges CorporateEntrepreneurshipModel:A SourceofGlobalCompetitiveness 11:00-13:00 ParallelSessionB2 CHALLENGES IN OUTSOURCING 13:00-14:00 LunchBreak 14:00-16:00 ParallelSessionC1 TRADE AND INVESTMENT ISSUES 1. Arpita Mukherjee and Paramita Deb Gupta, Indian CouncilforResearchon InternationalEconomicRelations 2.T.J.Joseph,ICFAIInstitute for Management Teachers (IIMT) 3. Peter D Ørberg Jensen, Copenhagen Business School, Denmark IndoUSFTA:ProspectsforIT-Enabled /BPOServices SpilloversfromForeignDirect InvestmentandAbsorptiveCapacity ofFirms:EvidencefromIndian ManufacturingIndustryafter Liberalisation Offshoring in Europe — Evidence of a Two-way Street From Denmark 12 IMR Conference 2006
  • 15.
    DETAILED SCHEDULE 14:00-16:00 ParallelSessionC2 NICHEAVENUES FOR OUTSOURCING 1. Priyan R Naik, Larson and ToubroLimited 2. Sanjay Choudhari1 , Venkata Reddy Muppani2 , Arunabh Prasad Gupta2 and Ashutosh Garg2 ,NationalInstituteof Construction Management and Research, Pune1 ; IIT, Bombay2 3. Bala Krishnamoorthy and Varun Nagalia, Narsee Monjee InstituteofManagementStudies, Mumbai 4. D.K. Agrawal and Sangeetha Chhabra,ForeSchoolof Management, New Delhi; Lal BahadurShastriInstituteof Management Dealership-ASingularRouteto Outsourcing Building Competencies through Maintenance Outsourcing: ACase Study of an Indian Glass Company CompetitiveStrategiesfor OutsourcinginHealthcareIndustry Outsourcing3PLServices:A Measurement of Indian Corporate Mindset 14:00-16:00 ParallelSessionC3 COMPARATIVE ASPECTS OF OUTSOURCING 1. Naresh K Malhotra1 , James Agarwal2 , Francis M. Ulgado1 and G Shainesh3 , Collegeof Management,GeorgiaInstituteof Technology1 ;Universityof Calgary,Canada2 ;IndianInstitute of Management Bangalore3 DifferencesinServiceQualitybetween DevelopedandDevelopingCountries: How Developing Countries Can ImprovetheirCompetitivenessinthe OutsourcingofServices 4. Sadhana Srivastava and RahulSen,National UniversityofSingapore; InstituteofSoutheastAsian Studies,Singapore Production Fragmentaion and Outsourcing:ImplicationsforIndia’s GlobalTradeIntegration IMR Conference 2006 13
  • 16.
    DETAILED SCHEDULE Friday,July14,2006 16:30-18:00 PlenarySession-1 Mr.Vikram Rao, President, Madura Garments 19:00-22:00 CulturalProgrammebyPuthaliKalarangafollowedbyConference Dinner 09:00-10:30 PlenarySession-2 Mr.JoeSigelman,Co-President,OfficeTiger 10:30-11:00 CoffeeBreak 11:00-13:00 ParallelSessionD1 IMPLICATIONS OF OUTSOURCING Saturday, July 15, 2006 2. Van V. Miller and Ananda Mukherji, HumanandEcological Resources,LosOjos;TexasA&M InternationalUniversity 3.ManojT.Thomas,Instituteof Rural Management Anand 4. Prarthan B Desai, Indian InstituteofManagement, Bangalore Mexican Maquilas and Indian BPOs: A CriticalComparison UnderstandingUrbantoRural OutsourcinginIndia:Basisand Potential IdentificationTowardsClientsin EmployeesofOutsourcingService Providers 1. Amarendu Nandy and Mukul G.Asher,NationalUniversityof Singapore 2. Gulnar Sharma and Sanjay Kaptan,JankideviBajajInstitute of Manangement, Mumbai Demographic Complementarities and Outsourcing:ImplicationsforIndia BPO and Employment Scenario in the Indian Economy 14 IMR Conference 2006
  • 17.
    DETAILED SCHEDULE 1. GyanPrakash and Avantika Singh,TezpurCentralUniversity; TERISchoolofAdvancedStudies, New Delhi 2. Vasanthi Srinivasan and Bineesh Kumar P, Indian InstituteofManagement, Bangalore 3. Abhishek Amal Sanyal, HSBC GlobalTechnology,Pune 4. SajalKabiraj1 ,D.P.Agrawal2 and Deepali Singh1 , ABV Indian InstituteofInformation Technology and Management, Gwalior1 ;Member,UPSC,Govt.of India2 5. Akash Prasad and Vivek Rathore,NALSARUniversityof Law,Hyderabad OutsourcingofHealthcareServicesin Rajasthan:AnExploratoryStudy Software Product Development Transition:ManagerialImplications fromaSubsidiaryPerspective ReverseOutsourcingthroughHybrid SourcingTM andItsEffectontheGlobal DeliveryModel Managing Strategic Change through OutsourcinginLogisticsCompanies:A SwedishPerspective IndiaInc.’sClaimtotheInternational DisputeResolutionMarket 11:00-13:00 ParallelSessionD2 ISSUES FROM SERVICE-PROVIDER INDUSTRIES 3. Arti Grover Goswami, Delhi SchoolofEconomics 4.SrinivasGunta,Indian InstituteofManagement Bangalore 5. Sourav Mukherji, Indian InstituteofManagement Bangalore TheWelfareImplicationsof OutsourcingintheHostCountry Co-locationofUnrelatedDivisionsin theITES-BPOIndustry:Dynamicsof ValueCreationandDestruction Outsourcing:PracticeinSearchofa Theory 13:00-14:00 LunchBreak IMR Conference 2006 15
  • 18.
    DETAILED SCHEDULE Saturday, July15, 2006 14:00-15:30 PanelDiscussion: GLOBAL COMPETITIVENESS THROUGH OUTSOURCING Mr.RavanBoddu,CEO,iSoftIndia Mr.AnoopHegde,CountryManager,FirstIndianCorporation Mr. Gopal Krishnan, Founder, Chairman and Managing Director,NinestarsInformationTechnologiesLimited Mr.SanjoyRoy Choudhary,AssistantVicePresident, Evalueserve Note:Thefour parallelsessionsforpaperpresentationaredenotedasA,B,C &D inthetable 16 IMR Conference 2006
  • 19.
  • 21.
    RajanVaradarajan, DistinguishedProfessorofMarketingandFordChairin Marketing &E-Commerce, Department of Marketing, Mays Business School, TexasA&MUniversity. Ph: 979-845-5809, Fax: 979-862-2811, Varadarajan@tamu.edu Based on the chatter in the business press and the general news media, one might be inclinedtoviewoutsourcingasverymucha21stcenturyphenomenon,largelylimitedto businessprocessoutsourcingandtakingplaceforthemostpart,intheurbancentresofthe DeccanPlateauofIndia—Bangalore,Chennai,HyderabadandMumbai.Further,relativeto earlierwavesofoutsourcing,suchastheoutsourcingofmanufacturingofgoodsduringthe 1980sand1990s,thecurrentwaveofoutsourcingofperformanceofservicesseemstohave generated much more backlash, outcry and resentment. Some attribute this to the less educatedandlessvocalblue-collarworkersinindustrialisedcountrieshavingbeenaffected byoffshoreoutsourcinginthemanufacturingsectorduringthe1980sand1990sversusthe bettereducatedandmorevocalwhitecollarworkersandprofessionalsinindustrialised countriesbeingaffectedbythecurrentwaveofoffshoreoutsourcingintheservicesector. Whenoutsourcingmanifestsassubstitutionoflabourwithtechnology,itiswidelyviewed asamarkoftechnologicalprogress.Casesinpointincludemoderndayautomatedtelephone exchanges performing tasks that were earlier performed by telephone operators, and automated teller machines performing tasks that were performed by human tellers. When outsourcingmanifestsasacustomerperformingtasksthatwereearlierperformedbythe firm,itischaracterisedas‘customerparticipation/involvementintheco-productionof service’andspawnsanewfieldofacademicinquiry.Forinstance,airlinecustomers,in additiontomakingreservationson-line,performingrelatedtaskssuchasseatselection andpre-printingofboardingpassathomeorwork,beforeheadingtotheairport(outsourcing tocustomers).Understandably,inthefaceofincreasingjetfuelprices,limitstolowering labourcosts,intensecompetitionthatlimitstheabilityofairlinestoraiseprices,outsourcing tootherfirmsandtocustomersbecomesacompetitiveimperative.Againstthisbackdrop, the paper focuses on the comparative advantage, competitive advantage and competitive imperativeaspectsoftheglobaloutsourcingofmanufacturingofgoodsandperformanceof services. COMPARATIVE ADVANTAGE, COMPETITIVE ADVANTAGE, COMPETITIVE IMPERATIVE AND GLOBAL OUTSOURCING COMPARATIVE ADVANTAGE, COMPETITIVE ADVANTAGE, COMPETITIVE IMPERATIVE AND GLOBAL OUTSOURCING IMR Conference 2006 19
  • 22.
    GLOBAL OUTSOURCING OFSERVICES AND DEVELOPMENT IN DELIVERY COUNTRIES Rupa Chanda, Professor of Economics, Indian Institute of Management, Bangalore. rupa@iimb.ernet.in Thispaperexaminestheimplicationsofglobaloutsourcingofservicesforvariousaspects ofeconomic,social,andhumandevelopmentinselecteddeliveryeconomiesinAsia,namely, Philippines,China,andIndia.Thepaperisasynthesisofthefindingsacrossthesethree countriesandprovidesacomparativeperspectiveontheimpactofservicesoutsourcingon theseeconomies.Theanalysisisbasedonaprimarysurveyandin-depthinterviewsconducted ineachofthethreetargetcountriesintheJanuary2005-February2006period,supplemented byinformationavailablefromvarioussecondarysources. Therearebroadlythreepartstothepaper.Thefirstpartdrawsupontheevidenceobtained fromtheprimarysurveyandin-depthinterviewstohighlightthemaincharacteristicsof theservicesoutsourcingindustryinthethreecountries,i.e.,thetypesofservicesoutsourced andsectorswhereoutsourcingoccurs,thenatureofthisoutsourcedworkacrossthevalue chain,thegeographicprofileofoutsourcing,thecharacteristicsofdeliveryfirmsinterms oftheirsize,diversificationofactivities,employment,features,ownershipstatus,and modeofexecution,amongothers.Thissectionalsohighlightsthemainfacilitatorsand constraintstoservicesoutsourcinginthethreecountries.Corroboratingdatatablesand simplecorrelationanalysisacrosskeyvariablesareprovidedtovalidatethediscussionand toshedfurtherinsightontheprofileofthisindustryineachcountryandtodrawcomparisons acrossthethreecountries. Thesecondpart,whichconstitutesthecoreoftheanalysisinthispaper,assessesthe impactofservicesoutsourcingonawiderangeofparameters.Someofthemaindimensions ofdevelopmentthatareaddressedinclude:directandindirectemployment;incomes;skill, knowledge,andtechnologytransfer;domesticandforeigninvestment;infrastructure;social andculturalnorms;occupationalhealth,andinter-sectoralresourceallocation.Corroborating datatablesaswellascorrelationanalysisareprovidedtohighlightthenatureoftheimpact ineachcountryandtohighlightsimilaritiesanddifferencesacrossthethreecountries. Thefinalsectiondrawsupontheanalysisintheprecedingsectionsaswellasthesurvey andinterviewresultstosuggestpoliciesrequiredatvariouslevelstonotonlyfacilitatethe growthoftheservicesoutsourcingindustryinthesethreecountries,buttoalsomakethis growthconducivetorealisinglongtermsocial,economic,andhumandevelopmentobjectives inasustainableandequitablemanner. 20 IMR Conference 2006
  • 23.
    OUTSOURCING AS ASELF-CORRECTING PHENOMENON: A GAIA HYPOTHESIS PERSPECTIVE AnandaMukherji, AssociateProfessorofManagement,Dept.ofManagement, MarketingandInternationalBusiness,CollegeofBusinessAdministration, TexasA&MInternationalUniversity,USA. Ph: 956-326-2526, Fax: 956-326-2494, max@tamiu.edu Jyotsna Mukherji, Assistant Professor of Marketing, Department of Management, Marketing and International Business, College of Business Administration,TexasA&MInternationalUniversity,USA. Ph: 956-326-2542, Fax: 956-326-2494, jyo@tamiu.edu Inourpaper,webrieflyexamineoutsourcingfromthetraditionaltransactioncosteconomics (TCE)perspective.Wethenexaminetheforcesthatdriveglobalisation.Wepresentoutsourcing fromtheGaiaself-regulatinghypothesisperspective.Wearguethatwiththephenomenonof outsourcing,asetofinterdependentforcesisreachingacriticalmass.Thiswillresultinunintended outcomesthatgofarbeyondacompany’sintenttoreducecosts. Therearetwoimportantfactorsthatexplainglobalisation,whichinturnfacilitatesoutsourcing. Thefirstarefourdrivers–expandingmarkets,pressuretolowercosts,increasedcompetition, andactivistgovernments.Thesecondistheincreasedlevelsofservice-relatedoutsourcing, whichisenabledbytechnologiesanddigitalisation.Withemploymentinthedevelopedeconomies beingpredominantlyintheservicesector,thereisconsiderableeconomicandpoliticalconcern aboutthelong-termimplicationsofservicejobsmovingtodevelopingcountries. We propose a different, though complementary perspective to the current outsourcing phenomenon.TheanalogyweuseistheGaiaself-regulatinghypothesis.Theprocessofself- regulationiscentraltotheGaia‘livingearth’hypothesiswheretheearthisseenasatightly coupledselfregulatorysystem.Outsourcingispartofaseriesofinterconnectedforcesthatisfar morethantheobviousoptimisationofcosts. Theinterconnectedforcesindevelopingcountries,likeIndiaandChina,thathavebeensupporting andfacilitatingoutsourcing, includetheagedemographicsthatsupportaproductiveworkforce, educationallevels,risingaspirations,apost-postcolonialmindsetofthepopulace,improved infrastructure,andcoherentgovernmentalpolicies,amongothers.However,wecontendthat theremaybeanumberofunintendedconsequences,whichweexplore.Incomelevelsindeveloping countrieslikeIndiaandChinaarelikelytorise,makingthemattractivemarketswithdisposable incomes.Wealsoforeseeafallinincomelevelsandconsumptionindevelopedcountries.The currentpatternofconsumptionisextremelyskewedwiththedevelopedworldconsumingata disproportionaterate.Theunintendedself-correctionthatresultsfromoutsourcingwillbalance thecurrentdisproportionalpatternofincomeandconsumption. Therearelikelytobeshiftsin thebalanceofeconomicandpoliticalpowerastheself-correctionplaysout. Webelievethattheperspectivewepresentinthispaperenablesustogobeyondthebusiness perspectiveofoutsourcingandincludeinouranalysisamuchlargerworldsystemperspective. IMR Conference 2006 21
  • 24.
    OUTSOURCING R&D: THE NEXTFRONTIER Jason M Pattit, PhD Candidate, Technology Strategy and Innovation Management, Snyder Centre for Innovation Management, Whitman School of Management,SyracuseUniversity. Ph: 315- 443-3443, jmpattit@syr.edu SPRaj,ProfessorofMarketing,CornellUniversity,Ithaca,NY. Ph: 607-254-5068, spr24@cornell.edu David Wilemon, Earl and Josephine Snyder Professor of Innovation and Entrepreneurship; Academic Director, Programme in Entrepreneurship and Emerging Enterprises, Director, Earl V Synder Centre for Innovation Management, Whitman School of Management, Syracuse University. Ph: 607-254-5068, dwilemon@som.syr.edu Overthelastcentury,mostfirmshaveprimarilyreliedontheirinternallaboratoriesfor R&D. The output from R&D helped to increase profits from organic growth through the developmentofnewproductsandprocesses.However,theincreasedmobilityandavailability ofknowledgeworkers,governmenttechnologyinitiativesandregulations,andtheglobal interconnectednessoffirmsduetotelecommunicationsandtheInternethavecontributed to the erosion of the dominance of the centralised corporate R&D lab and the increased fragmentationofsourcesofspecialisedknowledge.Additionally,developingcomplexnew productsandsystemsoftenrequirestheintegrationof‘deep’knowledgeandskillsfrom disparatetechnicalandscientificfields.Consequently,firmslackingadequatetechnical andscientificcompetenciestocompletelydevelopcomplexproductsandsystemsfrequently looktoexternalsourcesofknowledgeandtechnologytosupplementinternalexpertise. Collectively,thesefactorshavecontributedtoashiftintheinnovationlandscapetoa paradigmofOpenInnovation.Thisshifthasimplicationsforthesourcingofbasicscientific researchandthedevelopmentofcommercialisabletechnologies.Inthisarticleweexamine howavarietyoffactorsinfluencesthedecisiontooutsourceR&DinanOpenInnovation paradigm.Wealsodiscussissuesrelevanttomanagersstrugglingtocometogripswiththe emerging Open Innovation paradigm. 22 IMR Conference 2006
  • 25.
    R&D/KNOWLEDGE PROCESS OUTSOURCINGFROM JAPAN: AN UNEXPLORED COMPETITIVENESS OPPORTUNITY? K Momaya, AssociateProfessor,DepartmentofManagementStudies,IITDelhi. Ph: 91-80-26591174, Fax: +011 2686 2620, momaya@dms.iitd.ernet.in Outsourcing(OS)hasbeenaroundforagesandcanhaveasynergisticimpactonanindustry or business ecosystem (e.g. Keiretsu in Japan). Globalisation of OS has created many opportunitiesforfirmsinIndia.Havingbuiltsomefoundations(skills,capabilities,business models),progressivefirmsfromIndiahavetakentheinitiativetomoveupthevaluepyramid. ResearchindicatesthatKnowledgeProcessOutsourcing(KPO)maybeonesuchinitiative up the value pyramid and may turn out to be the next wave for India. At the same time, muchbiggeropportunitieslieinotheremergingindustriessuchasthecontentsindustry andallopportunitiesneedtobeexploredwithstrategicthinking. Thekeypurposeofthispaperistoexplorethelittleexploredopportunityofmanagement researchoutsourcingfromJapanasasourceofcompetitiveness.Systematicmethodology willbeusedtofocusonthemostrelevantelementsofoutsourcingforcompetitiveness. Exampleswillbegiventoillustratethatbiggeropportunitiesmaybeavailableinother industriesthansoftwareservicesandBPO,andinotherregionsandniches.Indicativekey questionsthatencouragestrategicthinkinghavebeenevolvedandgrouped. Takingcues from some experiments in more challenging R&D outsourcing, an attempt will be made to discussthefindingsfromapilotofKPO(R&DServices)beingdevelopedattheDepartment ofManagementStudies,IITD.Keyelementsofthepilotwillbediscussedandglimpseswill be given of value creation opportunities in cooperation with Japanese industries and institutes.Learningwillbesynthesisedandimplicationsdrawn.Keyleadershipinsightsare expectedtoemergeonthefollowingquestions: l HavingsucceededinEnglishspeakingmarkets,canJapanbethenextlevelofchallenge forcapablefirmsfromIndia? l AremarketsinemergingindustriesinJapanattractiveenough? l WhydoescooperationwithJapanremainalessexploredopportunityinIndia? l What can be the key areas of opportunity? l WhatarethekeysuccessfactorsintheKPOnicheinJapan? Keywords:CorporateCompetitiveness,KnowledgeProcessOutsourcing,Japan,StrategicOptions IMR Conference 2006 23
  • 26.
    BUSINESS PROCESS OUTSOURCING: KNOWLEDGEMANAGEMENT AS A COMPETITIVE STRATEGY K Manasa, Knowledge Management consultant, Wipro Technologies, Bangalore. Ph: 080-25502001, Fax: 080-25502160, manasa.kakulavarapu@wipro.com Kailash B L Srivastava, Associate Professor, Department of Humanities & SocialSciences,IITKharagpur. Ph: 03222-283624, kbls@hss.iitkgp.ernet.in Businessprocessoutsourcing,oneofthefastestgrowingsegmentsoftheITenabledservices industry,isdeterminedbythenatureofindustry,coordinationandcontrolmechanism, productmaturity,andlevelofinter-firmcompetition.Withincreasedcompetitioninthe BPOsector,Indianfirmshavetocontinuouslyprovetheircapabilitiestodeliverandcreate nearindispensablesituationsfortheparentorganisationtosurvivewithoutthem.This requiresnotonlytechnicalanddomainexpertisebutalsorefinedsystemsandpracticesto better serve customers and manage growth and challenge. Knowledge management (KM) as a strategy has immense potential to help BPOs gain competitiveedgebyprovidingvalueaddedservices.KMcanalsohelpaddresspainareas likeidentifyingdomainspecificskillscriticaltobusinessprocessthatisoutsourced, facilitatingfasterrampupamongfreshentrantsandretentionofvitalknowledgethatis likelytobelostduetohighattritionrates.Despitethelargebodyofliteratureonknowledge managementinavarietyofsettings,thereisapaucityofresearchassessingtheroleof knowledge management in the outsourcing business. Drawing from the research in the software services industry, this paper proposes ideas and guidelines on how knowledge managementcanbeimplementedtodeliversuperiorqualityandvalueaddedservices. Further,thepaperalsobrieflydiscussesthegrowingneedforsoundknowledgemanagement as the outsourcing vendors move up the value chain by providing high-end services i.e. ‘Knowledge process outsourcing’. The nature of knowledge work/services that can be outsourcedandtheroleofknowledgemanagementinenablingthecaptureandacquisition ofknowledgethroughtheoutsourcingrelationshiparealsodiscussed. 24 IMR Conference 2006
  • 27.
    BPO ADOPTION BYSMALL AND MEDIUM ENTERPRISES: AN INNOVATION-BASED APPROACH Pradeep Mukherjee, President & Managing Partner, Tholons, Asia Pacific Headquarters,Bangalore. Ph: 91-80-41325618, pradeep@tholons.com Abhijit Chaudhury, Professor, CIS Department, Bryant University, Rhode Island. Ph: 401-232-6418, Fax: 401-232-6435, achaudhu@bryant.edu NishantVerma,Principal,Tholons,AsiaPacificHeadquarters,Bangalore. Thetrendofbusinessprocessoutsourcing(BPO)isstrongintheWestandhasnowstarted tospreadamongsmallandmediumenterprises(SMEs),whoareusuallylaggardsinadopting suchinnovations.Thepurposeofthisstudyistoinvestigatefactorscontributingtothe adoption of BPO by SMEs in Western countries. The research model is based on Rogers’ diffusion of innovation (DOI) theory, according to which innovation is the adoption of ideasthatarenewtotheadoptingorganisations.InDOI,diffusionistheprocessbywhich an innovation is communicated through certain channels over time among members of a socialsystem.Theprocesshasseveralstages.Rogers,definesthediffusionstageasthe processthroughwhichthenewideaspreadsandtheadoptionprocessasthe‘mentalprocess throughwhichanindividualpasses…frominnovationtofinaladoption’. ThefocusofthisresearchisontheprocessofdiffusionandadoptionofBPOasanewidea. In the context of the literature on DOI, our model posits that it is the fit among four independentvariablesthatdeterminestheadoptionofaninnovation,thedependentvariable. Thefourfactorsare:innovationprofileorthecharacteristicsthatfavourtheadoptionofan innovation;innovatorprofile;environmentalcharacteristics;andsystemcharacteristics. ThemodelisappliedtoSMEs.Throughaliteraturesurvey,thegeneralcharacteristicsof SMEsaredeterminedintermsofformalisation,centralisationofdecision-making,diversity, sizeandeducation. Given such characteristics, the model recommends that the vendor community seek firms thatarelikelytobeearlyadopters(innovatorprofile),selectanSMEsectorwherecompetitive pressures are high, which is homogenous and big so as to permit economies of scale (environmentalcharacteristics),promotetrialabilityandobservabilityoftheirsolution (innovationprofile),andprovideadequatetrainingandlearningopportunitiestotheir clients(systemcharacteristics). IMR Conference 2006 25
  • 28.
    SHIFTS IN KNOWLEDGE-INTENSITYAND SME INTERNATIONALISATION: DIVERSIFYING FROM SOFTWARE SERVICES TO PRODUCTS Shameen Prashantham, AIM Research Fellow, University of Strathclyde, GraduateSchoolofBusiness,Glasgow,UnitedKingdom. Ph:+44-141-5536107,Fax:+44-141-5528851, Shameen@gsb.strath.ac.uk Naveen Marimuthu, Mindtree Consulting,Bangalore. Ph: +91 22 5644 5735, namarimuthu@deloitte.com Globaloutsourcingisfuellingtheentrepreneurialstrategyofenteringinternationalmarkets onthepartofsmallerfirmsintechnology-intensivesectors.Whiletraditionalviewsof internationalisation have emphasised the importance of market knowledge, more recent researchattheintersectionofstrategy,entrepreneurshipandinternationalbusinesspoints totheimportanceofknowledge-intensityindrivingthesefirms’internationalisation. Despiteconsiderableresearchontheinternationalisationofsmallertechnology-intensive firms,littleattentionhasbeenpaidintheliteraturetoupwardshiftsinknowledge-intensity thatfirmsmayengagein.Knowledge-intensiveofferingsaregenerallytakenasagivenand onlymarket-relatedchangeshavebeentypicallyconsidered.However,aprimarymotivation for internationalisation is growth and growth stems from vital resources that can be strengthenedorimproved.Itthusseemsquitelikelythatsomefirmswouldseektoenhance theirknowledge-intensityandfosterfurthergrowth,especiallyininternationalmarkets. Thisstudyaddressesthisgapbyinducingtheorythroughcase-studyresearchonaBritish software SME. The software industry – a setting for several studies on small firm internationalisation–offersthepossibilityofstudyinganupwardshiftinknowledge- intensityviz.diversificationfromservicestoproducts.Thestudydeepensunderstandingof therelationshipbetweenenhancementofknowledge-intensityandinternationalgrowth. Thecentralargumentisthatthisrelationshipispositivelymoderatedbycognitive(e.g. opportunity-seeking)abilities,managementoforganisationcultureandabsorptivecapacity i.e.theabilitytolearn.Ourcontributiontotheliteratureisthree-fold.First,weprovidea moreholisticperspectiveofentrepreneurialinternationalisationbyalsotakingintoaccount product-related strategic change (prior to market-related strategic change i.e. internationalisation). Second, the study enhances the learning perspective of internationalisationbyincorporatingcognitionandabsorptivecapacity.Third,wehighlight theroleofoverlookedorganisationalcharacteristicssuchasorganisationalculture.The paperalsodiscussesimplicationsforpractitionersandresearch. 26 IMR Conference 2006
  • 29.
    ENTREPRENEURIAL GLOBALISATION: LESSONS FROMTHE EXPERIENCES OF EUROPEAN SMALL AND MEDIUM ENTERPRISES U Srinivasa Rangan, Associate Professor of Strategy and International Business, Babson College, MA 02457, USA. Ph: 781-239-4237, rangan@babson.edu PeterSchumacher,PresidentandCEO,ValueLeadershipGroupInc,Frankfurt. Ph:+49-(0)-69-975-03406Fax:+49-(0)-69-975-03200, p.schumacher@value-leadership.com Indiaasadestinationofbusinessprocessoutsourcingandsoftwaredevelopmentisnowa widely recognised fact. Many American and several European multinational corporations have sought to exploit India’s low labour cost advantage in such areas. More recently, though,theseinternationalfirmshaveexpandedtheiruseofIndia’slowcosttalentpools in additional areas such as engineering, product design and development, and applied research.Theexperiencesofmanyofthesefirmshavebeenwrittenaboutinthepopular press,inbusinessschoolcasestudies,andinsomeacademicpapers.Themainthrustof muchofthiswritingistodemonstratehowaccesstolowcostfactorinputsinplacessuch asIndiaprovidesanopportunityforfirmstocompetemoreprofitablyinanincreasingly integratedworldwherefirms,multinationalorotherwise,facefiercecompetition.Whatis missingisanyrecognitionofawiderimplicationofglobalisationoffactormarkets. Inthispaper,theauthorsarguethatwiththeopportunitysetfordistributingthevalue chainofactivitiesacrosstheworldwiththearrivalofcountriessuchasIndia,internationally orientedfirmsalsoenjoytheopportunitytomoreentrepreneuriallyrethinktheircompetitive strategies.Suchanentrepreneurialglobalisationapproach,however,callsforsimultaneous changesinmultipleaspectsoftheorganisation.Morenimblefirms,oftensmallandmedium sizedones,areperhapsinabetterpositiontotakeadvantageofsuchastrategicapproach. BasedonseveralcasestudiesofEuropeansmallandmediumsizedenterprises(SMEs),the authors demonstrate how firms have sought to rethink their businesses from ground up, reconfiguretheirvaluechainactivitiesglobally,leveragetheresourcesofotherfirms, createstrategicoptionsfortheirfirms,andhaveimprovedtheircompetitivepositioninthe market place. The authors suggest that these SMEs may well be in the vanguard of an industrialrenaissanceinEurope,acontinentthathashithertobeenlesswellreceptiveto theuseofoff-shoreopportunitiesofferedbycountriessuchasIndia. The authors conclude with managerial recommendations as to how firms, small and large, couldtakeadvantageofglobalfactormarketsthroughcreativeandentrepreneurialstrategies. Theyalsoraisesomeadditionalresearchquestions,especiallyrelatingtoorganisational andmanagerialchallengesposedbyamoregloballydistributedassetandcapabilitysetfor firmsseekingtobeentrepreneuriallyglobal. IMR Conference 2006 27
  • 30.
    THE PERCEIVED IMPACTOF OUTSOURCING ON SMALL AND MEDIUM INDUSTRIES Jogendra Kumar Nayak, PhD student, IIT Kharagpur and Lecturer (Senior),RegionalCollegeofManagement,BijuPattnaikTechnical University,Orissa. jognayak@yahoo.com GautamSinha,Professor,IITKharagpur. KalyanKGuin,Professor,IITKharagpur. Recentliteraturesuggeststhatoutsourcing,properlyunderstoodandmanagedasanintegral partofstrategy,canaidcompetitiveness.Ontheotherhand,industryevidencesuggests that if overdone it could create a fragile organisation in the long run — the hollow corporation. This paper examines the reasons for outsourcing and its impact on the performanceoffirms.Anempiricalmethodwasadoptedandfirmswerestudiedonthebasis ofaquestionnairestudy.Thisstudyhashelpedinanalysingthevariousfacetsofoutsourcing anditsrelativeimportance.Itwouldactasaguidingtoolforpractitionersandresearchers. 28 IMR Conference 2006
  • 31.
    BENCHMARKING KNOWLEDGE GAPSFOR ASSESSING OUTSOURCING VIABILITY Sandhya Shekhar, Department of Management Studies, Indian Institute of TechnologyMadras. Ph: 91-44-22574550; Fax: 91-44-22574552, sandhya@iitm.ac.in L S Ganesh, Department of Management Studies, Indian Institute of TechnologyMadras. Ph: 91-44-22574551; Fax: 91-44-22574552, lsg@iitm.ac.in Globaloutsourcingisclearlyoneofthemajortrendsinrecenttimes.Whilethereisasurfeit ofarticlesandpapersaboutthisphenomenon,thereislittleresearchonriskmitigation strategiesforoutsourcingpartnerselection.Oneofthemajorriskfactorsisonaccountof knowledgegapsbetweentheoutsourcingorganisationandtheexternalprovider.Thispaper positsthatsincetheknowledgedimensionisacriticaloneforanyoutsourcedactivity,its objectiveassessmentisimportantintheoverallprocessofevaluationoftheexternalprovider. Thepaperproposesaformalprocessof‘knowledgegapassessment’toaddressthisfactor andasaninputtoassessingpartnerviability.Italsoidentifiestwoimportantdimensions thatarespecifictoanoutsourcingrelationshipthatwouldmakethisexercisesignificantly differenttoaknowledgegapassessmenttakenupinotherorganisationalcontexts.Finally thispaperoutlinesaconceptualmodelthattakesthesedimensionsintoaccountthrougha process of benchmarking and could be used as a generic tool for performing such an assessmentnotjustinanoutsourcingrelationshipbutinanyinter-organisationalcontext. IMR Conference 2006 29
  • 32.
    LEVERAGING OUTSOURCING –PERFORMANCE OF AND IMPLICATIONS FOR INDIAN INFORMATION TECHNOLOGY SERVICES INDUSTRY Srinivas Ainavolu, FellowshipStudent,StrategicManagementGroup, Indian InstituteofManagementCalcutta. Ph:033-28680490,Fax:033-24678062,srini@iimcal.ac.in Intheservicesdomain,theIndianinformationtechnology(IT)servicesindustryhasbeen oneofthebiggestbeneficiariesofoutsourcing.However,Indianvendorstraditionallyhave focusedontheexportmarket,possiblybecauseofthesmallersizeandlowerattractionof thedomesticmarketintermsofprofitability.Thecurrentdomesticmarketisathirdofthe exportmarket.TheIndianITservicesindustryisalsofairlyconcentrated.Thetopfivefirms haveacombinedshareofathirdofindustrysalesandthetoptwentyfirmstogethershare halftheindustryrevenues.Theindustryhasbeenquiteinnovativeinleveragingtheoffshore outsourcing model and has been growing at over thirty percent in the last decade. The currentnumberofplayersintheindustryisoverthreethousand.Manyofthesearesmallin size.Theplayersareofdifferenttypesandcanbeclassifiedintolarge,mediumandsmall IndianITservicesvendors,largeglobalITservicesplayersandfinally,smalleroverseasIT vendors.ThefocusofthispaperisonIndianvendors. CurrentlyIndianvendorsaretryingtomoveupthevaluecurveandarebiddingforhigher valueandbiggercontractsatthegloballevelandmanylargeIndianITservicesfirmshave been successful as primary vendors at the global level. At the same time, the domestic marketisincreasinglybeingcateredtobylargeglobalfirmswhoareservicinghighervalue andlargecontracts.Undertakinghighervalueworkdomesticallyandreplicatingtheexperience overseas would have been a more credible option for Indian firms as their traditional offshorebasedoutsourcingmodeliseasilyreplicable.Theincreasinguseofprimaryoffshoring bylargeglobalservicefirmsisanotherchallengetoIndianfirmsandhencethereisthe needforamoresustainablyadvantageouscompetitivemodel. Asoldmodelsandassumptionsarequicklygivingway,whatcapabilitiesdoIndianvendors needforeffectivelymeetingthechallengesofthefuture?Thispaperexaminesthecurrent performanceofIndianplayersandfocusesonwhattheyneedtoadoptinthelightofthe challenges. Combining data from industry databases with that of primary interview investigationsconductedwithindustrypersonnel,itdiscussesthechallengesbeforethese playersinthecontextofthematuringoftheindustry,openingupofnewercompetition andincreasedrampingupbyglobalmajors.Theimplicationsofthechangingcontextand thenormativemeasuresforIndianITservicevendorsarepresentedindetail. 30 IMR Conference 2006
  • 33.
    OUTSOURCING AND TRANSFER PRICINGCHALLENGES Suveera Gill, Reader, University Business School, Panjab University. Ph: +91-172- 2212389/2212398, Fax: 91-172-2541591, gillsuveera@yahoo.com Theworldhaswitnessedfundamentalchangesininternationalbusinessduringthelasttwo decades.Theflowofgoods,servicesandcapitalacrosscountrieshasincreasedmanifold. Entitiesarenolongerrestrictingtheiroperationstothedomesticmarketandhaveexpanded acrossinternationalbordersrapidly,becomingmultinationalandtransnationalenterprises. Tofurtherincreasetheircompetitiveness,manyenterprisesareturningtobusinessprocess outsourcing (BPO) and India has emerged as a prominent outsourcing hub. Traditional outsourcinghasincreasedinscopeandimpact,withtheinclusionofBPOandoffshoring, whichsavepreciousmanagementtimeandresourcesandalloworganisationstobuildupon corecompetencies.However,outsourcingcomeswithitsownchallengesandrisks. Oneoftheparamountconcernsofenterprisestodayisthedeterminationofthepriceat whichtherelatedpartiesselltheirproducts,offerservices,providefundsorconductresearch and development — commonly referred to as transfer pricing (TP). With ever increasing outsourcingandtheintroductionofTPrulesandregulationsbymoreandmorecountries, enterprisesaresubjecttoconflictingrulesanddoubletaxation.Thispapertracesthese differencesamongcountrieswhichhaveresultedindisputesbothbetweentaxauthorities andbetweentaxauthoritiesandtaxpayers.TheTPDirectorateinIndiawhichcarriedout its first audit in 2005 has already zeroed in on 250 companies for Rs. 1,250 crores of additionaltaxfortheircross-bordertransactions.TheoutstandingduesoftheIncomeTax departmentaresettorisefurtherandaslewofmultinationals,cuttingacrosssectors,have contested demands raised on them for violations of TP norms. While many multinationals havealreadyfiledappealschallengingtheirtaxdemands,afewothersareplanningtotake recoursetothemutualagreementprocedure(MAP).Thispaperscrutinisesthedecisionson variousTPcasesinIndiasoastoidentifythetaxationissueswhichneedtobeaddressed. Thepaperconcludesbyrecommendingtransferpricingreviewonsomeimportantissueslike taxability of permanent establishment (PE), advance price agreements (APA) and characterisationofnon-feebaseddealslikeroyalty,technicalfeesandservices,soasto ensurethattaxpayersmaximisetheirglobaltaxpositionandthatthetaxableprofitreturned doesreflecttheeconomicactivityperformedineachtaxjurisdiction. IMR Conference 2006 31
  • 34.
    CORPORATE ENTREPRENEURSHIP MODEL:A SOURCE OF GLOBAL COMPETITIVENESS BRBhardwaj, PhDstudent,IITDelhiandfaculty,BharartiVidyapeeth Institute of Management & Research, New Delhi. Phone: 9811545647, brotorauth@yahoo.com Sushil,ProfessorandChair,StrategicManagementGroup,Department ofManagementStudies,IndianInstituteofTechnology,Delhi. Ph: 91-80-26591189, sushil@dms.iitd.ernet.in KMomaya,AssociateProfessor,IITDelhi. Ph: 91-80-26591895, momaya@dms.iitd.ernet.in Thepurposeofthispaperistoexplorecorporateentrepreneurship(CE)asthesourceof competitiveness.TheobjectiveistodevelopaCEModelthatincludestheantecedentsof CE, and the parameters of competitiveness. This model can be used to enhance competitivenessintheglobalmarket.Applicationofregressionandcorrelationanalysis hasbeenshownindetail. Keywords:corporateentrepreneurship,competitiveness 32 IMR Conference 2006
  • 35.
    INDO US FTA:PROSPECTS FOR IT-ENABLED/BPO SERVICES ArpitaMukherjee,SeniorFellow,IndianCouncilforResearchonInternational EconomicRelations(ICRIER). Ph:91-11-24645218-20,arpita@icrier.res.in Paramita Deb Gupta, Research Assistant, Indian Council for Research on InternationalEconomicRelations(ICRIER). Ph: 91-11- 2464 5218-20, paramita@icrier.res.in Withincreasedglobalisationanddevelopmentofinformationtechnology,developedcountries suchastheUSarerelocatingalargecomponentofback-officeservices(forexample,payroll) andfront-officeservices(forexample,customercare)todevelopingcountriessuchas India.Suchrelocationshelpthecompaniesinreducingcostsandatthesametimemaintain sameorachievehigherlevelsofproductivityandefficiency.InIndia,relocationhasledto economic development, creation of employment, increase in wages, growth of ancillary industriesandinvestmentininfrastructure.Inspiteofthebenefits,someoftheUSstates, inrecentyears,haveenactedanti-outsourcingregulations,primarilytoprotectdomestic employment. Both India and the US have expressed interest in entering into an Free Trade Agreement (FTA). Although it is yet to be decided whether the agreement would cover only service sectors or it would be all comprehensive (covering goods, services, investment, trade facilitation,etc.),ithasbeenagreedthatIT-enabled/BPOserviceswillbeapriorityarea forFTAnegotiationsfromtheIndianperspective.Thecomplexityofthenegotiationsstems fromthefactthatthisisacross-sectoralissue,i.e.,itaffectsmorethanoneservicesector. Inthiscontext,thisstudydiscussesthecurrenttradeflowsbetweenIndiaandtheUSin thissector,highlightstheareasoftradepotential,recentregulatoryandotherdevelopments andtheirimplication,andbarrierstotrade.Thestudyisbasedonacountry-widesurveyof 112IT-enabled/BPOcompanies(95independentand17captive),whichhaveallormajority businesswiththeUS.ItdiscussestowhatextentIndiaandtheUSarelikelytoliberalise multilaterallyintheon-goingDohaRoundofnegotiations.Italsodiscussestheextentof liberalisationundertakenbytheUSandIndiaintheirotherbilateralagreements.Basedon thebarriersfacedbyIndiancompaniesintheUSandwhattheUSisofferingtoitstrading partnersinbilateralagreements,itsuggestsIndia’snegotiatingstrategiesanddiscusses whattheUSislikelytoaskreciprocally.ItfocusesonhowtheFTAcanbemutuallybeneficial. Finally,itsuggestsdomesticreformswhichwouldimproveproductivity,efficiencyandglobal competitivenessofthesectorandenableIndiatobenefitfromthebilateralliberalisation. IMR Conference 2006 33
  • 36.
    SPILLOVERS FROM FOREIGNDIRECT INVESTMENT AND ABSORPTIVE CAPACITY OF FIRMS: EVIDENCE FROM INDIAN MANUFACTURING INDUSTRY AFTER LIBERALISATION TJJoseph, PostDoctoralFellow,ICFAIInstituteforManagementTeachers (IIMT), Hyderabad – 500034. Ph: +91-40-23430474/ 23430494 / 23430254; Fax: +91-40-23430468, tjjoseph@gmail.com Foreigndirectinvestment(FDI)throughmultinationalenterprises(MNEs)isrecognisedas an important channel in bridging the technological gap between rich and poor countries throughacontinualprocessofinternationaltransferanddiffusionoftechnology.FDIis expectedtogenerateasetofexternalitiesondomesticproducers,whichareoftenreferred toas‘spillovers’.Domesticfirmsaresupposedtoincreasetheirproductivitybyadoptingthe brandnewtechnologiesofMNEs,knownashorizontal(intra-industry)spilloversfromFDI. Domesticfirmsmayalsobenefitwhentheyareemployedassuppliersorsubcontractorsto MNEs that helps them to expand output and achieve economies of scale. Such type of externalitiesarereferredtoasvertical(inter-industry)spillovers.However,thesespillovers do not occur naturally and depend on the ability of the domestic firms to absorb such knowledgespillovers. Theobjectiveofthisstudyistoanalysethespillovereffectsofbothhorizontalandbackward spilloversfromFDIontheproductivityofdomesticfirms,andtheroleofin-houseR&Dof domesticfirmsindeterminingtheabsorptivecapacityofspillovers.Thestudyanalyses paneldataforIndianmanufacturingfirmsfortheperiod1993-2004.Thespillovereffectsof FDIontheproductivityofdomesticfirmsaremeasuredincorporatingdifferentpossible spillovervariablesinanextendedproductionfunction.Sinceproductivitycanbeinfluenced byfirm-specifictechnologicalfactorsaswell,varioustechnologyvariablesareintroduced inthemodeltocontrolforsuchfactors.Theroleoftheabsorptivecapacityofdomestic firmsisinvestigatedintroducinginteractionvariablesbetweenin-houseR&Dofdomestic firmsandvariousspillovervariables.Thespecifiedmodelsareestimatedusingpaneldata estimationtechniques. Thestudyshowsevidenceofpositivespillovereffectfromthemarketpresenceofforeign firms—anincreaseintheproductivityofdomesticfirms.Theresultsindicatethatthereis bothapositivecompetitioneffectfromthepresenceofforeignfirms(horizontaleffect) andapositiveverticaleffectduetobackwardlinkagesbetweendomesticfirmsandforeign firms,wherelocalfirmsactassuppliersofrawmaterialstotheforeignfirms.Whilethe technologicalcapabilityofdomesticsuppliersisfoundtobeacriticalfactorinabsorbing thepositivebackwardspilloversfromforeignfirms,suchcapabilitybuildingisnotvery importantfordomesticfirmsinthesameindustrysectorinordertoabsorbthepositive spillovers.Theresultssuggeststrongpolicyemphasisinfacilitatingthecreationofsupply networksaroundleadingforeignfirmsandpolicyincentivestoencourageR&Dactivities. 34 IMR Conference 2006
  • 37.
    OFFSHORING IN EUROPE— EVIDENCE OF A TWO-WAY STREET FROM DENMARK Peter D Ørberg Jensen, Centre for Business and Development Studies, Copenhagen Business School, Denmark. Ph: +45-3815 3222, Fax: +45- 3815 3840, pj.ikl@cbs.dk Based on a large Danish survey covering companies in sectors with tradeable goods and services,thisworkingpaperpresentsresultsonoffshoringanditsjobimpactthataddnew perspectivestotheglobalisationdebate.Globalisationentailsacross-borderflowofjobs, butcontrarytothepictureofglobalisationportrayedinthemedia,itisnotaone-way street,butatwo-waystreet:Inthe2002-2005period,morejobswerecreatedasaresultof theoffshoringofactivitiestoEasternDenmarkfromcompaniesoutsideDenmark(i.e.inshored toDenmark)thanwereeliminatedduetooffshoringfromcompaniesintheDanishregion. Overall,theemploymenteffectsofbothoffshoringandinshoringwerefoundtobelimited withlessthanonepercentofalljobseitherlosttooffshoringorgainedvia‘inshoring’.We argue that for Denmark the worries in purely numerical terms regarding the employment effectsofglobalisationseemoverlyalarmist.However,thetrendsrevealedinthestudydo pose challenges for low-skilled labour — the group most negatively affected — and for highlyskilledspecialists,whofaceapressuretoupgradetheirskills.Wealsoarguethat policyimplicationscanbedrawninviewoftheresultstoensurethatlabourmarketsmeet thedemandsofglobalisingfirms. IMR Conference 2006 35
  • 38.
    PRODUCTION FRAGMENTATION AND OUTSOURCING:IMPLICATIONS FOR INDIA’S GLOBAL TRADE INTEGRATION Sadhana Srivastava, Research Scholar, South Asian Studies Programme, National University of Singapore. artp0320@nus.edu.sg RahulSen,Fellow,RegionalEconomicStudies,InstituteofSoutheastAsian Studies(ISEAS),Singapore.rahul@iseas.edu.sg The linkages between Foreign Direct Investment (FDI) and trade have assumed greater importance with increasing globalisation and rapid advancement in information and communications technologies, resulting in reduction in the cost of communications and logisticssupport.Thishasenhancedthescopeofinternationalproductionfragmentation, definedasthecross-borderfragmentationofcomponentproduction/assemblywithinvertically integratedproductionprocesses,notonlyinmerchandisetrade,butalsoincreasinglyin tradeincommercialservices. This paper analyses the trends, patterns and implications of international production fragmentationinbothIndia’smerchandisetradeaswellasintransactionincommercial services. Theprincipalresearchquestionstobeinvestigatedareasfollows.First,whetherIndian manufacturing is indeed experiencing the phenomenon of international product fragmentation. This is captured by analysing the trade in parts and components in the manufacturingsector,forwhichdisaggregatedproductleveldataisused.Second,isthe extenttowhichsuchtradeisbeingfacilitatedbymultinationalsthatengageincross- borderintra-industrytrade.Forthispurpose,thepaperdecomposesIndia’smanufacturing tradeintoone-waytradeandintra-industrytrade(IIT).Whilealargeportionofone-way tradewouldbeinter-industrytradeasexplainedbythetraditionalcomparativeadvantage theory,itwouldalsoincludetradewithchangesincommoditycategoriesintheprocessof transactionsinverticallyfragmentedproductionchains.TheestimatesofthevolumeofIIT inIndia’smanufacturingprovideusefulinsightsonthemagnitudeofproductfragmentation. Finally,thepaperprovidesmorebroadestimatesofIITinIndia’scommercialservicestrade, tohighlightthegrowingimportanceofinternationalfragmentationinservicesbywayof the phenomenon of outsourcing and offshoring. TheanalysispointstothefactthatIndiaisexperiencinginternationalproductfragmentation inbothitsmerchandiseandcommercialservicestrade,withthelattersectorexperiencing largescaleoffshoringactivities,particularlyintheICT-enabledservices.However,compared tomostdevelopingeconomiesinAsia(particularlyinEastAsia),Indiaisonlybeginningto experienceproductfragmentationinitsmerchandisetrade,andhasasignificantpotential forexpansionofthesameintheareaofauto-parts,electronicsandelectricalmachinery. 36 IMR Conference 2006
  • 39.
    DEALERSHIP – ASINGULAR ROUTE TO OUTSOURCING Priyan R Naik, Head, Product Support — Construction & Mining Business, Larsen&ToubroLtd.,Bangalore. Ph: 9844120053, Fax: 91-80-25580528, naikpr@larsentoubro.com Thepaperbringsouttheefficacyofusingauniquestrategyforoutsourcing.Outsourcingin theearthmovingindustryisuncommon,largelyduetotechnicalintricacies,technological obsolescence, unavailability of trained manpower and the sheer lack of exposure to the conceptsofoutsourcing. Thispaperdescribesanearthmovingandminingindustryframework,buttressedbysustainable strategies implemented to gain competitive advantage by outsourcing service and parts salestokeydealersacrossthecountry.Thebenefitsarenumerous:outstandingsaredown, workingcapitalisundercontrol,themarketexpands,availabilityandcoverageimproves, andmachineutilisationgoesup;meantimetorespond/repair(MTTR)valuesdropdramatically. Buttheimplementationprocessisarduous.Theavailabilityofdealercandidatesandthe viabilityofeachunitofdealershipareissues. Manpowerisaproblem.Channelconflicts ariseperiodically.Policieshavetobeevolvedateverystep. This paper describes the research methodology undertaken, the key managerial insights gained,therigourinvolved,thelargescaleanalysisthatwasundertakentoarrive at correctanswersandthelessonslearnt.Theauthorhaspresentedthisinhispersonalcapacity, asinformationabouttheactualorganisationsinvolvedinthisexerciseisnotinthepublic domain. IMR Conference 2006 37
  • 40.
    BUILDING COMPETENCIES THROUGHMAINTENANCE OUTSOURCING IN MANUFACTURING FIRMS: A CASE STUDY OF AN INDIAN GLASS COMPANY Sanjay Choudhari, Faculty, School of Management, National Institute of Construction Management and Research (NICMAR), Pune. Mobile: 0 98 22 000 828, sanjay_iim@yahoo.com Venkata Reddy Muppani, PhD candidate, Shailesh J Mehta School of Management, IIT Bombay. muppani@iitb.ac.in Arunabh Prasad Gupta, second year PGDM student, School of Management, NICMAR Pune. Ashutosh Garg, second year PGDM student, School of Management, NICMAR Pune. Organisationshaveputinsignificantefforttoimprovequality,serviceandflexibilityand reducecosttoachieveworld-classperformance.Thesefirmsarestrivingfornewcompetitive advantagestobuildupontheirmanufacturingcapabilities.Formanyfirms,partofthis efforthasincludedanexaminationoftheactivitiesofthemaintenancefunction. Since maintenanceisanintegralpartofmanufacturing,itcansignificantlyinfluenceafirm’s competitiveness.Thedesiretoreducecostsandimproveservicelevelshasledmanycompanies to review the way they do their maintenance work and to come up with new solutions and strategies to develop and increase their competitiveness. Outsourcing is one of these strategiesthatcanleadtogreatercompetitivenessandhencemanyorganisationsarenow outsourcingmaintenancebesidesseveralin-houseactivities.Outsourcingfocusesontwo strategicwaysofdevelopingcompetitiveadvantage:first,concentratingtheorganisation’s resourcesandinvestmentsonwhatitdoesbesti.e.thefirm’scorecompetenceandsecond, outsourcingallotheractivitiesforwhichthecompanyhasneitherastrategicneednora specialcapability. Thispaper,throughanextensiveliteraturereview,examinestheissuesofoutsourcing maintenanceinmanufacturingfirms.Theexistingmaintenanceoutsourcingframeworksin literaturearecriticallyexamined.Afivestepframeworkthatwouldallowefficientand effective implementation of outsourcing maintenance has been developed. Firms should firstmapmaintenanceactivitiesinalogicalareaandthenevaluateeachoftheseactivities criticallyoneffectivenessrequiredandriskinvolvedinoutsourcing.Oncetheactivitytobe outsourcedisestablished,thenextstepistodocumentapropermaintenanceoutsourcing plan.Itisalsoimportanttoevaluatetheoutsourcerbasedontheskillsandknowledge requiredforthatactivity.Havingidentifiedtheoutsourcer,asuitablemaintenanceoutsourcing contractistobeagreeduponandtheneffortsaretobemadeforsmoothhandoverofthe contract.Thisframeworkisappliedtoaglassmanufacturingfirmwhichiscontemplating outsourcingmaintenanceactivities. 38 IMR Conference 2006
  • 41.
    COMPETITIVE STRATEGIES FOROUTSOURCING IN HEALTHCARE INDUSTRY BalaKrishnamoorthy, Professor-BusinessPolicy,NarseeMonjeeInstitute of Management Studies (NMIMS)-Deemed University, Mumbai. Ph: 91-22-25568062, balark1@rediffmail.com Varun Nagalia, MBA II Student, NMIMS-Deemed University, Mumbai. Ph: 9198207 20383, varun_nagalia@rediffmail.com Inthepast,outsourcinghasbeenusedtacticallyasarapidandoftenshort-termsolution toaparticularneedorproblem.Theadoptionofastrategicperspectiveonoutsourcingis today regarded as one of the most useful and important business methodologies, giving organisationstheopportunitytoliberatetheirfullpotentialforprofitability,efficiencyand costeffectiveoperation,andallowingthemmaximumflexibilityintermsorretainingand broadeningtheircustomerfranchise.Adoptingthisstrategicapproachplaysakeyrolein theprivateandthepublicsectorsofmostoftheworld’sdevelopedcountries,andincreasingly in many developing ones. Thehealthcareindustryisgettingmoreandmorecompetitiveeveryday,whichhasledto anincreasinguseofoutsourcinginthesector.AccordingtoaMcKinseyreportthehealthcare marketisundertremendouspressurefromthreeforces: l Constrainedprofits:Thedecliningreimbursementsandincreasingcostscausinghospitals tooperateonrazorthinmargins. l Lowerservicemodels:Asdemandforservicesincreases,thebudgetandthemaintenance of adequate labour decrease leading to redefinition of acceptable and desirable qualitylevelsofservice. l Changingcustomerexpectations:Withincreasedavailabilityofinformation,expectations have increased multiple fold and there are greater options in terms of payment and servicelevels. Thispaperanalysesthedynamicchangesthathavetakenplaceinthedeliveryofhealth services, the changing demands and the changes in the outlook of healthcare delivery. Furtherthepaperlooksintothecontributionsofstrategicoutsourcingtomakehealthcare deliverycompetitive.Thepaperfocusesononesectionofthehealthcareoutsourcingmarket, namely,theproviders,inidentifyingstrategicoutsourcingpracticesintheindustryin generalandinselectleadinghospitals. IMR Conference 2006 39
  • 42.
    OUTSOURCING 3PL SERVICES:A MEASUREMENT OF INDIAN CORPORATE MINDSET DKAgrawal,AssociateProfessorandChairperson,MarketingArea,Fore School of Management, New Delhi. Ph: 9810627581, agrawal_dk2001@yahoo.com SangeetaChhabra,AssociateProfessor,EconomicsandOutsourcing,Lal BahadurShastriInstituteofManagement. chhabrasangeeta@yahoo.co.in Thereisagrowingawarenessaboutthestrategicroleoflogisticsservicesinthefirm’s overallsuccess.Businesseshavemovedbeyondviewinglogisticsasmerelyanareaforcost improvementtoviewingitasakeysourceofcompetitiveadvantagewithinafirm’stotal marketefforts.Customerservicehasbeenakeyfocalareaofresearchinthelogistics disciplineandtheliteratureinthearearevealsthatlogisticalservicecapabilitiescanbe leveragedtocreatecustomerandsuppliervaluethroughserviceperformance;enablemass customisation;createeffectivecustomerresponse-basedsystems;positivelyaffectcustomer satisfactionand,inturn,corporateperformance;provideadifferentiatingcompetitive advantage; and segment customers. Anecdotalevidencefindsamultibillion-dollarthird-partylogistics(3PL)industrydedicated toimprovingmanufacturers’logisticsservices.Mostfirmsindevelopedcountrieshavebeen outsourcing3PLservices.ThesizeoftheIndianmarketisimpressiveonaccountofits geographicalspread.Inrevenueterms,ithasbeenassessedatRs16,000croresbysome sourcesandRs3000croresbyothers.InGDPterms,itisfoundthatthetotallogistics spend in India is about 13% of the GDP which comes to about Rs. 3.58 lakh crore. The outsourcedportionisestimatedtobearound1.2lakhcrore. The growth of the 3PL industry in India is relatively low when compared with that of developedcountriesduetothepoorcorporatemindsettowardsoutsourcingof3PLservices. Companiesstillpreferthetraditionalfragmentedwayofmanagingshipment,warehousing, inventorymanagementandorderprocessingandfulfilment.Ontheotherhand,3PLisall aboutanintegratedapproachfortotallogisticalsolutionsensuringsuperiorcustomerservice. Buttheoldmindsetmaybeinducedbythelackofinvestmentsandscale,lackoffinancial support,lowawarenessandthehighoperationalcosts. Inthisempiricalresearch,anattemptismadetomeasurethemindsetofcorporateenterprises towards adaptation of 3PL along with their requirements and apprehensions. The survey revealedthatlogisticsheadsoffirmsstillemphasisecostreductionandgenerallyoverlook thelong-termimpactoncustomersatisfaction. 40 IMR Conference 2006
  • 43.
    DIFFERENCES IN SERVICEQUALITY BETWEEN DEVELOPED AND DEVELOPING COUNTRIES: HOW DEVELOPING COUNTRIES CAN IMPROVE THEIR COMPETITIVENESS IN THE OUTSOURCING OF SERVICES Naresh K Malhotra, Regents’ Professor, College of Management, Georgia InstituteofTechnology. Naresh.Malhotra@mgt.gatech.edu JamesAgarwal,AssociateProfessorandCoordinatorofMarketing,University ofCalgary,Canada. james.agarwal@haskayne.ucalgary.ca Francis M Ulgado, Associate Professor, College of Management, Georgia InstituteofTechnology. francis.ulgado@mgt.gatech.edu GShainesh,AssociateProfessor,Marketing,IndianInstituteofManagement Bangalore. shaineshg@iimb.ernet.in Servicesaccountforalmosttwo-thirdsoftheworld’stotaloutput.Tradeinservicesis growingfasterthaninotherareasandaccountsforonefifthofworldtrade. Exportsin commercialservicesarenowgrowingfasterthanexportsinmerchandisegoods. Currently, they account for more than 20% of the volume of merchandise trade. Evaluationofservicequalitybecomesdifficultduetothreecharacteristicsthatareinherent inservices—intangibility,heterogeneity,andinseparability.However,Parasuraman,etal. proposed a framework consisting of ten determinants or dimensions of service quality: reliability,access,understandingthecustomer,responsiveness,competence,courtesy, communication,credibility,security,andtangibleconsiderations. Malhotraetal.used thesedimensionsasabasisforacomparativeevaluationofthedeterminantsofservice qualitybetweendevelopedanddevelopingcountries. Thispaperextendsthegeneralframeworkforservicequalityandcorrespondinghypotheses developedbyMalhotraetal.whichcomparativelyevaluatestendimensionsofservicequality between developed and developing countries, to develop a framework for evaluating the competitiveness in the outsourcing of services. It draws several implications on how developingcountriescanimprovetheirglobalcompetitivenessintheoutsourcingofservices. IMR Conference 2006 41
  • 44.
    MEXICAN MAQUILAS ANDINDIAN BPOS: A CRITICAL COMPARISON VanVMiller, PrincipalResearcher,Human&EcologicalResources,Los Ojos,NM,USA. Ph: 513-868-2278, Fax: 513-868-0702, vvmiller@fuse.net AnandaMukherji, AssociateProfessorofManagement,Dept.ofManagement, MarketingandInternationalBusiness,CollegeofBusinessAdministration, TexasA&MInternationalUniversity,USA. Ph: 956-326-2526, Fax: 956-326-2494, max@tamiu.edu In November 1965, the Mexican government decided to initiate an industrialisation programme that was out-of-step with its stated policies and activities for economic development.TheprogrammeallowedMexicanmanufacturingplantstoimportrawmaterials fromtheUnitedStates,assemblethemintofinishedgoods,andthenre-exportthosegoods backtotheUnitedStates.Afterafewyears,thisearlyoutsourcingeffortformanufactured goods became known as the Mexican Maquiladora Programme (MMP), which flourished until 2001whenitexperiencedaseriousdownturn.Today,ithasonlypartiallyrecoveredbut appears to have stabilised, leading many to conclude that the programme has been a success.ButthenumbersrevealverylittleabouttheMMP’simpactupondevelopment,the primaryeconomicgoaloftheMexicannation. ThispapercomparesandcontrastsMexico’smaquiladorasectorwithIndia’sBPOsector— outsourcingforservices.Inbothcountries,thestatedoverarchingprincipleforeconomic developmentduringthelatterhalfofthetwentiethcenturywasautarkyuntilmajorcrises forcedapolicyreversal(1986inMexicoand1991inIndia)uponeachnation.Giventhese contextualsimilaritiesandtheforty-yearhistoryoftheMMP,ourmajortaskinthisproposed paper is to examine the economic development outcomes of the MMP and then to apply that knowledgetoIndia’sBPOsinanattemptto‘see’ifthelatterisbetterpositionedasadriver of economic development. Toundertakethisanalyticaltask,weuseconceptsfrominstitutionaltheoryanddatafrom multiple sources. Economic development is operationalised in standard terms as labour turnoverandverticaleconomiclinkages.Byapplyingtheinstitutionalideasofrules,routines, andtransactioncosts,weareabletoexplainthedevelopmentalshortcomingsoftheMMP incertaintypesofmaquiladoraoperationsandtopredictsimilaroutcomesinIndianBPOs withthesametypesofoperations.However,amajorcaveattothispredictionistheobserved differenceintherules-routinesnexusforeachofthecountries.Theimportanceofthis nexusforeconomicdevelopmentisfundamentaltoouranalysis.Thedataforthisproject come from a stratified, random sample of maquiladoras in eight Mexican cities, Mexican governmentreports,andinformationinthepublicdomainforIndianBPOs. 42 IMR Conference 2006
  • 45.
    UNDERSTANDING URBAN TORURAL OUTSOURCING IN INDIA: BASIS AND POTENTIAL Manoj T Thomas, Fellow student, Institute of Rural Management (IRMA), Anand. Ph: 09426523746, manojtthomas@gmail.com This paper attempts to understand the phenomenon of urban to rural outsourcing, whose potential has now begun to emerge, due to the changes in the technology and market environment. Hitherto, urban to rural outsourcing has not been focussed upon, and even the issue of urban-rural linkages has not been properly understood. At the same time, ‘offshoring’hasbroughtouttheadvantagesofexploitinggeographicaldifferencesincosts andcapabilities.Thoughsubcontractinghastraditionallybeenbetweenurbanfirmsdueto easeinensuringqualityandmanagingeffectivecoordination,theadventofnewinformation technologieshasthepotentialtochangethis.Drawingonthelargertheoriesofoutsourcing, thepapertriestounderstandhowthesecanbeapplicableforurbantoruraloutsourcing, and at the same time understand how this process is different owing to the rural-urban characteristics. The paper attempts this in three ways. First it tries to understand the differences in characteristicsbetweenruralandurbanIndiatoconsidertheservicesthatcanbeoutsourced. This includes an idea of the differences in demographic and natural resources and the differencesincostsofotherfactors.Thetraditionalinteractionbetweenurbanandrural has been characterised by movement of labour and agricultural and natural resource commodities from rural to urban, and movement of produced goods from urban to rural areas.Thepapertriestoanalysethetechnologiesthathavethepotentialtoremoveblocks tosustainedruralurbaninteractions. Thepaperexploresissuesliketheconstraintsonurban-ruraloutsourcing,theimpactof urban-ruraloutsourcingonproduction,andissuessuchasmigration;andthepotential quantum or extent of this phenomenon. The paper also discusses the changing role of agentsandtheimportanceofruralinfrastructureforfacilitatingurban-ruraloutsourcing. IMR Conference 2006 43
  • 46.
    IDENTIFICATION TOWARDS CLIENTSBY EMPLOYEES OF OUTSOURCING SERVICE PROVIDERS PrarthanBDesai,FellowStudent(OB-HRM),IndianInstituteofManagement Bangalore. Ph: 0-93425 62485, prarthanb02@iimb.ernet.in. Employeesworkinginanoutsourcingserviceproviderorganisationareformallypartofthe employingorganisation.However,theyspendasignificantpartoftheirdailyworklife handlingtheoutsourcedbusinessprocessesofclientorganisations.Theyareexposedto theorganisationalroutines,culture,andperformanceappraisalandrewardcriteriaofboth organisations and therefore they may exhibit dual organisational identification — one towardstheiremployingorganisationandtheothertowardstheirclientorganisations. Organisationalidentificationreferstoemployees’perceptionofbelongingnesstotheir organisation.Itisimportanttounderstandemployees’organisationalidentificationbecause it can influence important individual outcomes, such as psychological well-being of employees, and organisational level outcomes, such as cooperation among employees and organisationalcitizenshipbehaviour. This conceptual paper attempts to answer two research questions: (1) What are the antecedentsspecifictotheoutsourcedbusinessprocessthatinfluencesalienceofemployee identificationtowardstheclient?(2)Whatfactorswoulddeterminewhetheremployees’ identificationtowardtheclientisinconflictorincongruencewiththeiridentification towardstheemployingorganisation? Thepaperproposesthattherearecertainantecedentsspecifictotheoutsourcedbusiness process, which influence the salience of employee identification towards the client organisation,thesebeing:(1)codifiabilityoftheknowledge,(2)amountofinteraction withthestakeholders(e.g.,suppliers,employees,orcustomers)oftheclient,and(3) amountofrelation-specificinvestmentsrequiredbytheemployingorganisation.Thepaper alsoproposesthattheemployees’identificationwiththeclientbeinginconflictorcongruence withtheiridentificationwiththeemployingorganisationisdeterminedbythedifference in:(1)organisationalcultureoftheclientandtheemployingorganisation,and(2)the forcesofinstitutionalisomorphismprevalentinthecountrywheretheclientislocatedand thecountrywheretheemployingorganisationislocated. 44 IMR Conference 2006
  • 47.
    DEMOGRAPHIC COMPLEMENTARITIES AND OUTSOURCING:IMPLICATIONS FOR INDIA Amarendu Nandy, Research Scholar, Department of Economics, National UniversityofSingapore. amarendu@nus.edu.sg MukulGAsher,Professor,LKYSchoolofPublicPolicy,NationalUniversity ofSingapore. sppasher@nus.edu.sg ThispaperanalysestheimplicationsforIndiaofdifferingglobaldemographictrendsfor outsourcingandoffshoring.Italsobrieflynotestheimplicationsofdifferingdemographic trendsamongtheIndianstates.Thepaperarguesthatdemographiccomplimentarityprovides Indiawithaone-timeopportunityforthenexttwotothreedecadeswhichitmustutilise tosustainitsgrowthrateandoccupyallsegmentsofglobaloutsourcingandoffshoring activities.Indiahashadadegreeofsuccessintheseactivities.Ithoweverfacesinternal andexternalchallenges.WithappropriatepoliciesandfocusIndiacancontinuetomaintain itsshare,andhelpnurturegloballycompetitivecompanies. IMR Conference 2006 45
  • 48.
    BPO AND THEEMPLOYMENT SCENARIO IN THE INDIAN ECONOMY GulnarSharma,Professor,JankideviBajajInstituteofManagement, SNDT Women’s University, Mumbai. drgulnarsharma@rediffmail.com Sanjay Kaptan, Professor, Department of Commerce, SNDT Women’s University,Mumbai. BusinessProcessOutsourcing(BPO)asaprudentbusinesspolicytosustaincompetitive advantageandgrowisnowagloballyacceptedfact.Thistrendtooutsourcecoversmany industriesandseveralorganisationalfunctions,andhasthecapacitytogeneratehuge employment.Ithasgeneratedemploymentattherateof13%sofarandislikelytogrowto 31%by2010.Differentfunctionsgeneratedifferentquantaofemployment,withthecustomer care operation generating the highest employment. The ITES sector employed 41,000 employees in 1999 and the figure is expected to reach 1,100,000 by 2008. Revenues from theindustry,whichstoodatRs20.30billionin1999,areexpectedtoreachRs.810billion by2008. While the BPO sector is fast developing and has tremendous employment potential, there aremanyfunctionalproblemssuchasthehighalterationrate,costcuttingtechniquesand alackofstabilityinthegenerationofemployment.Issueslikesecrecy,organisational commitment and dedication to a particular value system are surfacing. There is every possibilitythatintheyearstocometheseissuesmayturnouttobefunctionalproblems andmayaffecttheorganisationalqualityofwork,workcultureandindustrialclimate. ThispaperdealswithhowtheBPOindustrywillinfluencetheopportunitiesandchallenges in relation to the employment scenario in India, and also analyses the impact of BPO on employmentinIndia.Itattemptstoidentifyfactorsresponsiblefortheshiftinemployment patternanditsimpactonthesectoralchangesinemploymentpattern. 46 IMR Conference 2006
  • 49.
    THE WELFARE IMPLICATIONSOF OUTSOURCING IN THE HOST COUNTRY Arti Grover Goswami, Delhi School of Economics, Ph: 91-11-27666703, Fax: 91-11-2766-7159, arti@econdse.org Foreigndirectinvestment(FDI)maynotnecessarilybethemostwelfareenhancingformof internationalinvestment.Thehostcountryhasamenuofoptionssuchasjointventure, technologylicensing,franchising,outsourcingetc.Ahostcountry’schoiceoforganisational form should depend on its growth and welfare effects. This paper compares the welfare effectsofFDIwiththatofoutsourcinginthehostcountry,usingtheGrossman-Helpman qualityladdersframework.Ifthehostcountry’sabsorptivecapacityisaboveagiventhreshold level,outsourcingismorewelfareenhancingvis-à-visFDI.Ontheotherhand,evenwith lowerthanthresholdabsorptivecapacity,outsourcingbeingwelfareimprovingascompared toFDIcannotberuledout.Animplicationofthisisthatinvestmentinhumancapitalpays off more when outsourcing is the chosen mode of organisation of fragmented production, ratherthanFDI. IMR Conference 2006 47
  • 50.
    CO-LOCATION OF UNRELATEDDIVISIONS: DYNAMICS OF VALUE CREATION AND DESTRUCTION SrinivasGunta,FellowStudent,IndianInstituteofManagement Bangalore. Ph: +91-80-26993014, Fax: +91-80-26584050, srinivasg01@iimb.ernet.in Outsourcinginserviceshasassumedtheroleofabusinessimperativewithinashortperiod oftenyears,especiallyinthecontextofoffshoringtocountriessuchasIndia.Costadvantages havegivenwaytoadvantagesintheareasofvalueadditionandstrategictransformationof businesses. The focus has shifted to ways and means of organising for superior service delivery–leadingtodecisionswithrespecttomode(offshoringvson-shoring),method (captiveprovidervsthird-partyprovider)andmeans(specialisedprovidervsfull-lineprovider). Mostoftheoutsourcingoutfitsareorganisedwithallthedivisionsco-located,especially initially.Managerially,thisenablesconcentrationofdirectauthorityforoverallsupervision; economically,itcutscostsduetopoolingofresourcesandbetterutilisationofcommon infrastructure.Thisistrueofcaptiveaswellasthirdpartyprovidersandspecialised(in termsoffocus)aswellasfull-lineproviders. Anoutsourcingoutfittypicallyhasdifferentactivitiesorganisedintovariousdivisionssuch assoftwaredevelopment,callcentresandtransactionprocessingcentres.Withinthisbroad schemaofclassification,severaldivisionsorsub-divisionsmaybeorganisedbasedonthe nature, periodicity and complexity of the work. This would obviously imply that the qualifications,skillsetsandtheoutlookoftheemployeeswoulddifferaswell.Considering thefactthattheadventofIThasenabled‘divisionofwork’toobviateco-location,itcan beassumedthatco-locationofdisparatedivisionslacksacompellingreason.Co-location insuchascenario,wherethedivisionsaredisparateandinter-divisionalemployeeslack theskillstoevaluateotherdivisionsortheiremployees,posesaninterestingproblemfor organisationtheorists. The comparative evaluations that the divisions attempt of one another can take several forms.Itcantaketheformofinter-divisionallearningthattakesofffromaninternal competitionperspective;itcantakeaformthatlendsitselftoinformalknowledgetransfer, andinextremesituations,itcantaketheformofdestructionofvalueattheorganisational levelwhilebeneficialatthedivisionallevel.Thispaperreviewsliteratureintheareasofco- locationandproductdevelopmentextensivelytodelineatethedynamicsofvaluecreation anddestruction.Itcomesupwithpropositionsonthesuitabilityofco-locatingvis-à-vis the modes, methods and means of outsourcing. 48 IMR Conference 2006
  • 51.
    SouravMukherji, AsistantProfessor,OrganisationalBehaviourandHuman Resources Management,Indian Institute of Management Bangalore. Ph: 91-80-26993145, souravm@iimb.ernet.in Thephenomenonof‘outsourcing’hasstartedtodominatethepresentbusinesslandscape. Unlikeinthepastwhenorganisationswouldtypicallyoutsourcenon-coreactivitieslikethe frontofficeorsecurityservices,today’sorganisationsareoutsourcingactivitiesthatare criticaltotheirbusiness,suchasstrategyformulation,R&Dorhumanresourcemanagement. Seniormanagers,therefore,needtohaveatheoreticalfoundationonwhichtheycanbase theiroutsourcingdecisions.Inthispaper,Idrawupontransactioncoststheorytolaydown aframeworkforanalysinganyoutsourcingdecision.Whenorganisationsoutsource,theygo tothe‘market’forconductinganeconomicactivitythattheycouldhaveotherwiseconducted withina‘hierarchy’,i.e.,withintheboundaryoftheirorganisation.Sinceboththe‘market’ andthe‘hierarchy’havetheirownsetsofcostsandbenefits,anoutsourcingdecision,inits simplestform,isachoiceoftheoptionthathasabetterbenefit-to-costratio.Having establishedthetheoreticalbasis,Ilookatspecificexamplesofoutsourcingdecisions witnessedintheIndianindustry,suchasKingfisherAirlinesoutsourcinggroundhandling facilitiestoIndianAirlinesorThermaxoutsourcingtheirstrategyformulationtoMcKinsey, inordertoexplainthatorganisationstodayhavemultipleobjectivesbehindtheiroutsourcing decisions.Iidentifyfourcategoriesofsuchobjectives,namelycostminimisation,accessto privilegedassets,superiorresourceleverageandriskdiversification,whicharecollectively exhaustivebutnotmutuallyexclusive.Whileexplainingeachofthesecategories,Ienrich thetheoreticalframeworkproposedabovewithnotionsof‘knowledgespillover’and‘reputation capital’–variablesthathavesofarremainedabsentorimplicitindiscussionsonoutsourcing. I end this paper with an explanation of why outsourcing is a natural consequence of the informationageandhowinformationtechnologyiscreatingmarketconditionssuitablefor organisationstospecialise.Thispaperistheoreticalinnaturebutitdrawsextensivelyfrom examplesofoutsourcingintherealworldinordertoexplainandapplythetheory.Whenit comestooutsourcingdecisions,suchatheoreticalfoundationwouldenablethepractising managertomovebeyondsimplisticargumentslike‘coreversusnon-core’or‘converting capitalexpenditureintovariableexpenses’(bothofwhichareconsequencesratherthan causesforoutsourcing)andenablethemtodoathoroughanalysisoftheobjectivesand possibleconsequencesoftheiroutsourcingdecision. OUTSOURCING: PRACTICE IN SEARCH OF A THEORY IMR Conference 2006 49
  • 52.
    OUTSOURCING OF HEALTHCARESERVICES IN RAJASTHAN: AN EXPLORATORY STUDY GyanPrakash, AssistantProfessor,SchoolofManagementSciences, TezpurCentralUniversity,Assam. Ph: 03712-267007 ext. 5013, gp@tezu.ernet.in Avantika Singh, Lecturer, Department of Policy Studies, TERI School of AdvancedStudies,NewDelhi.avantika@teri.res.in Outsourcingtodayhasemergedasoneoftheseveralresponsestocorrecttheanomaliesin publicprovisionofhealthcare,sharetheresponsibilityandincreasethepenetrationof healthcareservices.Thispaperistheoutcomeofanexploratorystudyonoutsourcinginthe DirectorateofMedicalandHealthServices(DMHS),GovernmentofRajasthan.Theobjectives ofthisstudyaretounderstandtherationaleforoutsourcing,theinstitutionalarrangements foroutsourcing,contractdesignanditdealswithsomeoftheexperiencesofimplementation. ThestudyrevealsthatDMHSisoutsourcingbothancillaryandclinicalservices(preventive andcurative).Ancillaryservicesaretangible,makingiteasiertodefinetheproductand monitorperformance.However,definingtheproductismoredifficultandcostsofenforcing thecontractarequitehighincaseofpreventiveandcurativehealthcare.Organisational restructuringthroughagencificationandformationofRajasthanMedicalReliefSocieties has lent the government autonomy and flexibility, and created formal mechanisms for garneringtheparticipationofPPsandNGOsinthedeliveryofhealthcareservices.Though outsourcing has been going on for some time now, the government is yet to lay down a regulatory framework. Such a framework would serve to minimise uncertainties and lay down an incentive structure. There is a need for economic regulation that promotes competitionandatthesametimepreventsadverseoutcomessuchasescalationofcosts, exploitationandinequity.Sinceservicedeliveryoccursintheprocessofinteractionbetween clientandprovider,thereisaneedforasystemofqualitymeasurement. A persistent concern with outsourcing is how it will affect the access of marginalised groupstohealthcare.Withtheinvolvementoftheprivatesector,‘choices’haveimproved. However,thepoormaybeseverelylimitedintheircapacitytoaccesstheseservicesbecause oftheirinabilitytopay.Thoughtheprivatesectorcancomplementthegovernment’sefforts andmaybeevendoitbetter,yetitcannotleadthehealthsectorinadirectionlikelyto maximise its contribution to the health of the population. Therefore, the state cannot relinquishitsresponsibilityofprovisionofhealthcaretoallinanequitablemanner.There islimitedevidenceontheefficiencyandequityimplicationsofcontracting.Thisstudy couldinfactserveasastartingpointforasystematicenquiry. IndexTerms:Contractingout,outsourcing,publichealth,regulation. 50 IMR Conference 2006
  • 53.
    SOFTWARE PRODUCT DEVELOPMENT TRANSITION:MANAGERIAL IMPLICATIONS FROM A SUBSIDIARY PERSPECTIVE Vasanthi Srinivasan, Associate Professor, Organisational Behaviour and Human Resources Management, Indian Institute of Management Bangalore. Ph: +91-80-26993046, Fax: +91-80-26581602, vasanthi@iimb.ernet.in BineeshKumarP,Student,PostGraduateProgrammeinSoftwareEnterprise Management, Indian Institute of Management Bangalore. Manymultinationaltechnologycompanieshaveoffshoredproductdevelopmentactivities toIndia.Decisionsrelatedtothetransitionaredecidedbythetopmanagementlocatedat the headquarters in consultation with the senior management in India, taking into considerationthelong-termstrategicobjectivesoftheparentandthesubsidiary.Atransition decision is made and communicated and at this stage a project team is formed to manage thetransition.Sometransitionstendtobesuccessfulwhileothersdonot.Theobjectiveof thisstudywastounderstandthepre-requisitefactorsforasuccessfultransitionusinga groundedtheoryapproach.Fourprojecttransitionsinasinglemultinationalsubsidiary werestudied.Basedonthesefourcases,anattempthasbeenmadetoidentifythefactors thatarecriticalforsuccessfultransition.Thelifestageoftheproduct/project,the composition of the existing team/new team, organisational motives for the transition, perceivedandactualmanagementsupport,andcommunicationemergedasthefivefactors whichappeartosignificantlyinfluencethesuccessorfailureofatransition. IMR Conference 2006 51
  • 54.
    REVERSE OUTSOURCING THROUGHHYBRID SOURCING™ AND ITS EFFECT ON THE GLOBAL DELIVERY MODEL Abhishek Amal Sanyal, Software Quality Advisor, Software Engineering PerformanceGroup,HSBCGlobalTechnologyLtd.,Pune. Ph: 91-20-56037299, abhishekamalsanyal@hsbc.co.in IT companies across the world, according to the norm, are going in for Global Delivery Models (GDM) of outsourcing which aim at cost-effective IT system development and deployment,andconsequentlyhaveputupdevelopmentcentresinlow-cost,distant-shore locationslikeIndia,China,Philippines,etc. Reverse Outsourcing through Hybrid Sourcing™ is the brainchild of three American IT entrepreneurswhoclaimtobe‘bringingoutsourcingcloser’toAmericanshores.Intheir scheme,theyplantoanchoracruiseshipjustoutsidetheterritorialwatersoftheUSA,so as to bypass the stringent Worker Laws and the need of H1B visas. This ship will be the living-and-workingareaofabout600IndianandRussiansoftwareengineerswhowillwork at three times the salary they receive at home but 1/3 of the salary that would go to an AmericandeveloperontheAmericanmainland.Consequently,thecoreandalliedoutsourced jobswouldflowbacktoAmericaresultinginreverseoutsourcing.However,itwouldstill leveragethetangibleandallimportantbenefitofreducedoverallcostsfortheclient organisationandtheintangiblebutequallyimportantbenefitsofdatasecurity,client- serviceproviderinteraction,publicopinion,local-job-creation,etc. WithHybridSourcing™claimingtobefunnelling90%ofitsrevenuebacktotheAmerican mainlandbutstillprovidingthesamelow-costandgoodqualitycombination,itisbuta matteroftimethatReverseOutsourcingfindsitsfeetinthequicksandoftheglobaleconomy. Insuchasituation,wheredoestheaveragesoftwareengineerondistant-shoresfindhimself? Theauthorplanstoanalysethetwosystemsvis-à-visthefollowingfactors– 1. Costofinitiationandsustainedoperation 2. Perceivedclientbenefitsandlosses 3. Inherentadvantages,limitationsandoutrightdrawbacks 4. Legalandmoralissues 5. Impactondistant-shorejobs FortheReverseOutsourcingmodel,theauthorlooksat Hybrid-Sourcing™beingofferedby SeaCodeLtd.,SanDiego,USAwhile,forthetraditionaloutsourcingmodel,theGDMofan IndianITServiceCompanyinthesamesphereofbusinessandoperatinginIndiaisexamined. 52 IMR Conference 2006
  • 55.
    MANAGING STRATEGIC CHANGETHROUGH OUTSOURCING IN LOGISTICS COMPANIES: A SWEDISH PERSPECTIVE SajalKabiraj,PhDStudent,ABV-IndianInstituteofInformationTechnology and Management, Gwalior/ Product Manager - Analytics, Datamatics Inc., Sweden. skabiraj@rediffmail.com; kabiraj@vsnlnet DPAgrawal,Member,UnionPublicServiceCommission,Govt.ofIndia,Delhi. Ph: 011-24670835, prof_dpa@rediffmail.com; agarwaldp@yahoo.com DeepaliSingh,AsstistantProfessor,ABV-IndianInstituteofInformation Technology and Management, Gwalior. Ph: 0751-2449803, Fax: 0751-2449808, deepalipsingh@gmail.com; dr_deepali@iiitm.ac.in Swedishlogisticscompaniesarefacingintensecompetitionwithbusinessesandlongterm clientsmovingtolowcostdestinations.Thoughthismaybeattributedtotheoutsourcing phenomenon,thispaperlooksatevolvingabusinessmodeltocontrolandlimittheflowof customers through the Strategic Change Management process. The term strategic change, asitisusedinthestrategicmanagementliterature,mainlyreferstothedevelopmentand renewalofcorporatestrategiesinanenvironmentalcontextofexternalpressuresandthreats. A need for such change is recognised when past experience, knowledge and competence no longerfitthecircumstancesoftheexternalenvironment.Thisforcesmanagerstoshiftfrom existingcompetenciestoexperimentationwithnewskillsandtheexplorationofmarket opportunities. When strategic change is on the agenda, the organisation is forced to internalisenewinformationaspartoftheorganisationalknowledgebase,developingnew knowledge and competence. Theauthorsdiscusstwocases,SchenkerLogisticsandDeutschePostNetWorldwide(better knownasDHLWorldwideExpress)basedinJonkoping(Sweden),throughpersonalinterviews conductedwith30managers,forgaininganunderstandingofthekindofchallengestopmanagers faceinaturbulentenvironmentwhentryingtoalignstrategicintentandstrategicactionfor supplychainmanagement.Thecasesalsoaffordinsightsintohowstrategicchangecanbe managedandwhatmanagerscandotorecogniseandhandle‘strategicdissonance’forensuring ‘success’inthechangeprocesswhileoutsourcing. Thiscouldthrowlightonthetheoreticaland practicalframeworks,criticisingtheconceptof ‘fit’ anditsunderlyingdualisticassumptions aboutstrategyandstructure,organisationandenvironment,andstrategicintentandstrategic action.Thepaperanalyseshowtheroleofsupplychainmanagementandtheuseofsupplychain management competence change when outsourcing. The study indicates that supply chain managementcompetenceisofsignificantimportancenotonlyforefficientlogisticsprocess management,butalsofornewproductdesignandprocurement,regardlessoftheextentof outsourcing.Thedifferentwaysofintegratingsupplychainmanagementwithvariousfunctions andprocessesbothwithintheorganisationandwithsuppliersarediscussed. Keywords:SupplyChainManagementStrategy,StrategicChange,Outsourcing,BusinessModel IMR Conference 2006 53
  • 56.
    INDIA INC’S CLAIMTO THE INTERNATIONAL DISPUTE RESOLUTION MARKET Aakash Prasad and Vivek Rathore, National Academy of Legal Studies and Research,Hyderabad. In the present era of global commerce, the employment of efficient legal and dispute resolutionservicesbecomescrucialasinterfacewithlawisimperativeatalllevelsoftrade, bothnationalandinternational.Furtherinthisageofglobalisation,legalservicesare becomingglobal,thusallowinglegalprofessionalstotranscendbordersandbecomepartof aninternationalworkforce.Thispaperaddressesthechangingtrendsinthecontextof legalservicesandoutsourcing. Thepaperlooksatwhyitmakessensetooutsourcelegalservices.Primarilythreeaspectsof outsourcingarecovered:Firstly,outsourcingtheprocesspartoflegalservicesi.e.the growingareaofLegalProcessOutsourcing(LPO)andtheopportunitiesitcanofferIndia. Secondly,abriefanalysisoftheIndianlegalsystem,withreferencetoitscounterparts namelyChina,theUSandtheUK,andtheopportunitiesitoffersforoutsourcing.Thirdly,a studyofthepresentIndianlegalscenarioandareasforreform,andtheIndianclaiminthe AlternativeDisputeResolution(ADR)market.Thepaperalsooffersacasestudyofasector thatgivesimmenseinsightintothemajordebatessurroundingoutsourcingandthefactors whichactuallyenhancecompetitivenessthroughoutsourcing. 54 IMR Conference 2006
  • 57.
    D.K.Agrawal Fore Schoolof Management, New Delhi D.P.Agrawal Member,UnionPublicServiceCommission, Govt.ofIndia,Delhi James Agarwal UniversityofCalgary,Canada SrinivasAinavolu IndianInstituteofManagement,Calcutta MukulG.Asher NationalUniversityofSingapore ArindamBanerrji MD & COO, Deutsche Bank Operations International B.R.Bhardwaj BharatiVidyapeethInstituteofManagement andResearch,NewDelhi Ravan Boddu CEO,iSoftIndia Rupa Chanda IndianInstituteofManagementBangalore AbhijitChaudhary BryantUniversity,RhodeIsland Amitabh Chaudhry ManagingDirector&CEO,ProgeonLtd. Sangeetha Chhabra LalBahadurShastriInstituteofManagement SanjayChoudhari NationalInstituteofConstruction Management and Research, Pune Paramita Deb Gupta IndianCouncilforResearchonInternational EconomicRelations PrarthanBDesai IndianInstituteofManagementBangalore L.S.Ganesh IndianInstituteofTechnology,Madras AshutoshGarg NationalInstituteofConstruction Management and Research, Pune SuveeraGill UniversityBusinessSchool,PanjabUniversity ArtiGroverGoswami DelhiSchoolofEconomics Name Institution LIST OF SPEAKERS IMR Conference 2006 55
  • 58.
    Name Institution LIST OFSPEAKERS KalyanKGuin IndianInstituteofTechnology,Kharagpur SrinivasGunta IndianInstituteofManagementBangalore Anoop Hegde CountryManager,FirstIndianCorporation T.J.Joseph ICFAIInstituteforManagement Teachers(IIMT),Hyderabad SajalKabiraj ABVIndianInstituteofInformation Technology and Management, Gwalior SanjayKaptan SNDT Women’s University, Mumbai BalaKrishnamoorthy Narsee Monjee Institute of Management Studies,Mumbai GopalKrishnan Founder,ChairmanandManagingDirectorof NinestarsInformationTechnologiesLimited Bineesh Kumar P IndianInstituteofManagementBangalore T.K.Kurien CEO, Wipro BPO NareshKMalhotra GeorgiaInstituteofTechnology K. Manasa WiproTechnologies,Bangalore Naveen Marimuthu MindtreeConsulting,Bangalore VanV.Miller HumanandEcologicalResources,LosOjos,USA K. Momaya IndianInstituteofTechnology,Delhi ArpitaMukherjee IndianCouncilforResearchonInternational EconomicRelations PradeepMukherjee Tholons,AsiaPacificHQ,Bangalore Ananda Mukherji TexasA&MInternationalUniversity,USA JyotsnaMukherji TexasA&MInternationalUniversity,USA SouravMukherji IndianInstituteofManagementBangalore 56 IMR Conference 2006
  • 59.
    Name Institution LIST OFSPEAKERS Venkata Reddy Muppani IndianInstituteofTechnology,Bombay C.S.Murali VP,CorporateInitiatives,Cognizant TechnologySolutions VarunNagalia Narsee Monjee Institute of Management Studies,Mumbai PriyanRNaik LarsonandToubroLimited Amarendu Nandy NationalUniversityofSingapore Jogendra Kumar Nayak IndianInstituteofTechnology,Kharagpur PeterDOrbergJensen Copenhagen Business School, Denmark JasonMPattit SnyderCentreforInnovationManagement, SyracuseUniversity GyanPrakash SchoolofManagementScience,Tezpur CentralUniversity,Assam AkashPrasad NALSARUniversityofLaw,Hyderabad Arunabh Prasad Gupta NationalInstituteofConstruction Management and Research, Pune Shameen Prashantham UniversityofStrathclyde,UnitedKingdom Nadathur S Raghavan Co-founder,InfosysTechnologiesand Nadathur Investments and Holdings S.P.Raj CornellUniversity,Ithaca,NY U.SrinivasRangan BabsonCollege,USA Vikram Rao Pesident,MaduraGarments VivekRathore NALSARUniversityofLaw,Hyderabad Sanjoy Roy Choudhary AssistantVicePresident,Evalueserve Abhishek Amal Sanyal HSBCGlobalTechnologyLtd.,Pune IMR Conference 2006 57
  • 60.
    Name Institution Peter SchumacherPresidentandCEO,ValueLeadershipGroup RahulSen RegionalEconomicStudies,ISEAS, Singapore G.Shainesh IndianInstituteofManagementBangalore Gulnar Sharma JankideviBajajInstituteofManangement, Mumbai Sandhya Shekhar IndianInstituteofTechnology,Madras JoeSigelman Co-President,OfficeTiger AvantikaSingh TERISchoolofAdvancedStudies,NewDelhi DeepaliSingh ABVIndianInstituteofInformation Technology and Management, Gwalior Gautam Sinha IndianInstituteofTechnology,Kharagpur VasanthiSrinivasan Indian InstituteofManagementBangalore KailashBLSrivastava IndianInstituteofTechnology,Kharagpur SadhanaSrivastava NationalUniversityofSingapore Sushil IndianInstituteofTechnology,Delhi Manoj T. Thomas Institute of Rural Management Anand FrancisM.Ulgado GeorgiaInstituteofTechnology RajanVaradarajan TexasA&MUniversity,USA NishantVerma Tholons,AsiaPacificHQ,Bangalore David Wilemon SnyderCentreforInnovationManagement, SyracuseUniversity LIST OF SPEAKERS 58 IMR Conference 2006
  • 61.
    IIMB Management Review(IMR) is a premier management journal in India that presents researchandideasinthefieldofmanagementinareaderfriendlyformattomanagement practitioners and educators. Articles published in IMR are conceptually sound and methodologicallyrigorous,withthepotentialtoadvancemanagementtheoryandpractice andconsequentlyhavealongshelflife.IMRalsocarriesarangeoffeatureswhichgivesthe journalitsuniquepositioning. Aftermorethan15yearsofpublication,IMRhasachievedadistinctivepositioningfor itselfbothinthequalityofitscontentanditsreadership.IMR’sestimatedreadershipof 30,000 – 35,000 includes the ‘Who’s Who’ of Indian business – the top management of reputedbusinessfirmsinthecountry,managementconsultants,academicsandstudentsin reputedbusinessschoolsinIndia. FeaturesofIMR Noothermanagementjournalinthecountrycurrentlyofferssuchawideandbalancedset offeatures: l TheInterviewseekstoelicitfrombusinessleaders,uniqueandsuccessfulpractices thatadvancethepracticeofmanagement.TheInterviewbringsoutcriticallearnings andconceptualimplicationsforawideaudience. l The Round Table brings together academics, policy makers and leaders from industry who brainstorm on critical issues and extract multi-dimensional perspectives from chosen themes. l Articles that extend knowledge of the subject through empirical work or by building onexistingtheory,anddrawouttheimplicationsofresearchforpractitioners.All articlesgothroughadoubleblindrefereeingprocess. l Management Educators’ Forum, that explores issues germane to management pedagogy, where educators share new approaches and methods in terms of research, course content, teaching methods and teaching aids, and other issues that they considerrelevanttotheirfield. l A blend of other features, including book reviews that provide a window to new ideas in the world of management, and research in management and associated fieldsthatisontheanvil. IMR on CD IMRisavailableinelectronicformandtheCDversionofIMRcontainsthefulltextofthe editorialcontentofthejournalaspublishedintheprintedition(exceptadvertisements). Thisissoldtospecifiedsubscriberswithfullpermissiontodisseminatecontentstotheir students, employees and managers. ABOUT IIMB MANAGEMENT REVIEW IMR Conference 2006 59
  • 62.
    IMREditorialAdvisoryBoard The editorial advisoryboard consists of reputed academics and management practitionersbothfromIndiaandabroad.ProfBMahadevan,(Chairperson),IndianInstitute ofManagementBangalore,ProfVRaviAnshuman,IndianInstituteofManagementBangalore, ProfMukulGAsher,NationalUniversityofSingapore,Singapore,ProfNBalasubramanian, Indian Institute of Management Bangalore, Prof Prashant Bordia, School of Management, UniversityofSouthAustralia,Australia,ProfRupaChanda,IndianInstituteofManagement Bangalore,ProfKChandrasekharan,NanyangTechnologicalUniversity,Singapore,ProfJayant RKale,GeorgiaStateUniversity,USA,DrVPKochikar,Infosys,Bangalore,ProfPraveenK Kopalle,AmosTuckSchoolofBusiness,Dartmouth,USA,ProfGopalNaik,IndianInstitute of Management Bangalore, Prof Abhoy K Ojha, Indian Institute of Management Bangalore, Prof J Ramachandran, Indian Institute of Management Bangalore, Prof S Ramesh Kumar, Indian Institute of Management Bangalore, Prof Sanjit Sengupta, San Francisco State University, USA, Prof K Sudhir, School of Management, Yale University, USA, Mr A D B Talwatte,ManagingPartner,Ernst&Young,SriLanka,ProfGerardJTellis,Universityof SouthernCalifornia,LosAngeles,USA,ProfRajanVaradarajan,TexasA&MUniversity,USA Prof V Venugopal, Nyenrode Business School, The Netherlands, Prof M J Xavier, Orfalea CollegeofBusiness,California,USA,Co-ordinator,StudentAffairs:MrSrinivasGunta,FPM, IndianInstituteofManagementBangalore Contact Us Forenquiriesregardingsubscription,advertisement,manuscriptsubmissionoranyother, pleasecontacttheIMRSecretariatatreview@iimb.ernet.inorwritetousat ABOUT IIMB MANAGEMENT REVIEW IIMB Management Review IndianInstituteofManagementBangalore, Bannerghatta Road, Bangalore 560 076. Ph: (91-80) 26993099 Fax: (91-80) 26584050 Website:www.iimb.ernet.in/review 60 IMR Conference 2006
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    Indian Institute ofManagement Bangalore IIMB Reception 2658 2450 - 54 IIMB MDC – Reception 3295 / 3443 / 3444 IIMB Management Review Secretariat/IMRCSecretariat 3099 / 2699 3059, 2658 9917 CentralPergola 3237 Class Rooms (M11, M12 & M13) 3027 ComputerCentre 3067 / 3071 / 3072 HealthCentre 3066 IIMB MDC Laundry Service 3320 AthicaDepartmentalStores 3033 IMRCOrganisingChair Prof.BMahadevan, E Block Ground, Room No.12 3466, 2658 9917 IMRCLogistics Ms.K.R.Usha, E Block Ground, Room No.7 3464 Ms.HariniSrinivasan, E Block Ground,Room No.11 3153 Mr.SrinivasGunta 93413 33748 (Mobile) Ms.G.Shashikala, E Block Ground, Room No.10 3099 / 9880220118 (Mobile) Mrs.PriyaVasu E Block Ground,Room No.10 3099 / 9342550070 (Mobile) IMPORTANT TELEPHONE NUMBERS* *ToaccessanyoftheIIMBnumbersfromoutsidetheInstitute’sEPABXsystem,please prefix2699totheextensionnumber. INDIAN INSTITUTE OF MANAGEMENT BANGALORE IMR Conference 2006 61
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    Airport 140 /142 / 2526 6233 CityRailwayStation Enquiry 131 / 132 / 133 / 134 TrainArrival/Dept. Enquiry 22200971 CityTaxi 26780044 IndianAirlines 141 / 2210 6793 / 2522 5973 / 2522 6233 JetAirways 22291613 / 25220671 SaharaIndiaAirline 2522 1287 / 2523 8135 AirDeccan 25230429 OTHER IMPORTANT NUMBERS 62 IMR Conference 2006