A SEMINAR REPORT ON

“Increase IT outsourcing increase unemployment: Special reference to India”

Submitted By:-

Badal Kumar Saini MBA 2nd SEM

(Department of Management studies)

Poornima Institute of Engineering & TechnologyISI-2 RIICO Institutional Area, Goner Road, Sitapura, Jaipur 2010-2012

INTRODUCTION TO INDUSTRY

Outsourcing refers to the techniques of overcoming of any problem of one company with the help of other related company for example. Software, information, technology etc. It involves the transfer of the management and/or day-to-day execution of an entire business function to an external service provider. The client organization and the supplier enter into a contractual agreement that defines the transferred services. Under the agreement the supplier acquires the means of production in the form of a transfer of people, assets and other resources from the client. The client agrees to procure the services from the supplier for the term of the contract. Business segments typically outsourced include information technology, human resources, facilities and real estate management, and accounting. Many companies also outsource customer support and call center functions like telemarketing, customer services, market research, manufacturing and engineering.

IT OUTSOURCING

Information technology outsourcing or ITO is a company’s outsourcing of computer or internet related work, such as programming, to other companies. It is used in business process outsourcing or BPO’s, Which is the outsourcing of the work that does not require much of technical skills.

Information technology (IT) outsourcing is the outsourcing of information technology and system operation to a suitable third party technology solution provider companies outsource their IT development and management task to vendor achieve benefits such as financial saving ,technical capabilities and market place ability.

Financial saving is a crucial driver for IT outsourcing as in the case of the business process outsourcing (BPO) and customer service outsourcing (CSO).

IT outsourcing is a rapidly grooving industry .data monitor and Everest consulting have estimated the global IT outsourcing market to be worth USD 163 billion in 2004 which are increase by USD 253.1 billion in 2008

Objective of the study

The primary objective of my study is to analyze the how IT outsourcing affect to employment. The objective is to identify how the IT outsourcing dominate the employment & increase the unemployment. How the companies in the market adopted the new technology and how much what’s kind of affect it have on employment. We analyzing the various kind of IT outsourcing adopting by the company for increase and promoting the good reputation in the market.

Scope of the study

The scope of the study will be specifically in the major companies including Small skill industries and various organized and unorganized firm. BPOs have a great scope in India. Around five year back, BPOs were just a means by which companies could save costs only a few activities were outsourced. But now BPOs are emerging as a management tools and focus is shifting from non-core process to core process this is how BPOs gave rise to KPOs &Losing the near future BPOs may be give rise to other sectors as well.IT outsourcing provide jobs to employee because for this required Engineers, MB’s etc.

Research Methodology

Title of the study: - “Increase IT Outsourcing, Increase unemployment: special Reference to India”

Duration of the project

Week: 1- Submission of blue print of the study. Week: 2- Submission of abstract and finalization of the abstract. Week: 3-Submission of the synopsis on the basis of literature review. Week: 4- Finalization of synopsis. Week: 5- Collection of secondary data. Week: 6- Collection of secondary data to generate chapterization. Week: 7- Finalization of chapterization. Week: 8-SWOT Analysis of the study. Week: 9-Finalization of the report. Week: 10- submission of report on May 3-5-2011

Type of the research Exploratory Research, The study based on quantitative research approach that

involves the generation of data in quantitative form, which can be subjected to rigorous quantitative analysis in a formal.

The method of the study is quantitative, means collection of secondary data

and analyzing them.

Data Sources

These are the following source of secondary data collection.

Articles News paper Internet (website) Books

Fact and finding Global research findings

PricewaterhouseCoopers commissioned a study of outsourcing trends amongst 300 of the largest global companies, including 26 large Canadian organizations. The research, conducted by an independent market research organization, highlighted some interesting issues and trends amongst the Canadian participants.

73% of the organizations have outsourced at least one activity or process. The main reasons for outsourcing are: to enable a focus on core competencies; enhance profitability and shareholder value; and avoid the investment in technology required to enhance efficiency.

The most commonly outsourced activities and those most Likely to be outsourced in the near future are: benefits administration; payroll processing; logistics; real estate management; and internal audit.

About half of the respondents believe outsourcing to be more important to their organizations than was the case three years ago. 95% were somewhat or very satisfied with their outsourcing to date, while 63% achieved at least the cost savings expected from outsourcing.

Limitations of the Study

Here company doing outsourcing of information from India and out of India. Thus, it is not easy to predict the how type of IT he outsource or to find how many cost he incurred on them. When we come on IT outsourcing than we don’t predict that how many affect to the employment, Here in this report you are going to get information about such type of IT outsourcing giants. In such way the limitations of the study are scarcity of the reliable secondary

data, vast area of the study and limitation of time period.

CONCLUSION The outsourcing trend has become a concerning, and debated topic in Indian politics and

economics.   The main outsourcing purpose is cutting production cost by transferring India jobs to lower paid foreign workers. Some views outsourcing as the way company‘s completeness, others see this as negative effect due to losing jobs.   As a student of College Management who major in Business and also minor in Economic, I strongly believe that outsourcing is damaging India‘s economy.

The India’s growing unemployment rate is related to this outsourcing trend. One figure from Forrester’s Research shows that at least 40% of Fortune 1,000 companies are sending India jobs overseas. The proponents of outsourcing argue that the outsourced workers will be able to find job replacements through retraining. However, according to a report by the McKinsey Global Institute, 31% of workers who lost their jobs never found employment, (Rein gold). In addition, he negative effects of outsourcing are obvious.   As India lose their jobs to cheaper overseas labor, their spending must reduce to minimum level of surviving. This, in turn, will reduce sales and services in domestic national, thereby affect other people incomes. By outsourcing, companies are able to reduce cost of products, but who could afford to buy them?

Rising Government Spending. When many people losing their jobs as a result of outsourcing, there are fewer payroll tax receipts and fewer contributions to Social Security and Medicare. Government revenues mainly depend on income and sale tax. Reduction in this payments, add to outgoing payments for unemployment benefits will result in increasing government spending. If those moneys were using for educational, healthcare or other funding, it would have been better for India’s economy.

Disrupting the Education System. Besides effect of rising government spending, outsourcing also is threatening education system.

SUGGESTION

The general methodology in IT-BPO should be total transparency in its HR practices to ensure continuous of an individual goals with the organizational goals.

multi-dimensional approach needs to be adopted. More of concerted efforts only would help to retain the talent. Everyone has to contribute to hold the employees little longer period.

Career progression should be based on the performance and not on the number of years of experience or seniority in the organization.

Companies can recruit the spouses of their employees, and non recruitable persons like housewives and old age people

In India the IT-BPO is still nascent industry. It lacks licensing policies, labour law restriction, common state laws for 24x 7 services and working in night shift, long term financing options for infrastructure development and red tape in the sanctioning  of the policies. There is no single body or forum to represent the views, problem and issues of the industry or the national level. NASSCOM takes ITES under is purview but industry would be benefited by the body purely devoted to IT-BPO. There should be common platform for all Indian-BPO to share best practices and move the industry from commoditization.