OUTSOURCING IN KASHMIR: Information technology professionals at work at Magnum Software Services on the outskirts of Srinagar on Sept. 22. Newly-launched Magnum Software Services is blazing a trail for the business process outsourcing industry in Kashmir where the 15-year-old separatist insurgency has deterred investors from setting up back office service companies. (Photo: AFP)

A new phenomenon of creating back-up call centers to hedge against the risk of natural or political disruptions in India could eventually erode the country’s preeminent position as a global back office hub, The Wall Street Journal has reported.

American corporations that outsource their work to India have now begun to insist on Plan B locations such as the Philippines to avert any likely disruptions in India. Raman Roy, the chief executive of Wipro Spectramind Ltd. who is among the pioneers in the outsourcing business, was quoted as saying, Our customers are telling us they want to expand our footprint to mitigate geopolitical risk. The company has seven locations in India but will now have to look elsewhere.

That is where a country like the Philippines, where English is widely spoken and has a youthful population of 84 million, comes into the play. Wipro isng a call center in the Philippines where it plans to hire 1,000 workers. This dispersal of outsourcing business could dilute India’s current 80 percent share and halve it by 2007, according to U.S. consulting group Gartner Inc. Eastern Europe is also considered another competitor to challenge India’s supremacy in the business.

Meanwhile, another report in the Journal said Latin America comes out ahead of India and China in the offshoring trend when factors such as labor quality, labor supplies and time-zone differences are taken into account. However, on a purely cost-driven basis Indian cities Delhi, Madras and Bangalore still take first three of four spots, according to a study of 20 top offshoring markets done by Jones Lang LaSalle, Inc, a real estate firm in Chicago.

(Compiled from news dispatches by M. Chooki)