News : BT Group Looks to Shift Some Outsourced Processes
BANGALORE, Oct 29, 2013 -- British telecommunications company BT Group is looking at shifting some outsourced processes to its own captive centres in India and Malaysia, in keeping with the trend of multinationals pulling back on technology outsourcing. BT's plan is part of a new wave, where US corporations are rethinking on what parts of technology they should outsource and what they must retain in house.
Analysts said that Londonbased BT, which has been among the early outsourcers, is now worried that it may have gone too far and is looking at bringing some control back. If the plan fructifies, vendors like Tech Mahindra, Tata Consultancy Services and Accenture could end up with less work from BT.
"BT is moving work selectively to the captive," said a senior industry executive close to the developments on condition of anonymity. "Over a period of time, it has outsourced so much that they don't have the skills within the company. So nobody knows the system within BT because TechM has built and run it for more than a decade."
The executive said initially the number of processes taken back would be small. He pointed out that the telecom provider had been "insourcing" from all top vendors for the past five-six quarters.
While the trend of bringing back outsourced work has not reached worrying proportions yet, such moves will not bring cheer to India's IT industry, which is forecast to grow just 12-14% in 2013-14.
Industry experts said that as the multi-billion dollar technology contracts awarded in 2000-03 come up for renewal, some companies are not averse to revisiting the "build versus buy" proposition, especially as enterprise technology is changing rapidly and external service providers too are going through a learning curve.
Contracts worth nearly $100 billion (nearly .`6.2 lakh crore) are up for renewal this year, according to outsourcing consultancy Everest Group, and companies are hoping to wrest away chunks of the deals from multinational incumbents.
However, outsourcing industry experts are not worried. KS Viswanathan, vice-president at industry body Nasscom said organisations outsource work to third parties for scale and cost-optimisation but turn to in-sourcing for regulatory issues.
He said large organisations follow a cycle, where they outsource the work to third party and then bring back some work to increase control and accountability.
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Published: Tuesday, October 29, 2013