Sep

30

The drama on Wall Street continues as the rank-and-file lawmakers on Main Street, Washington escalate financial fears.

The US House of Representatives rejected the USD700 billion economic bailout plan through a 228 to 205 vote. By the end of what is could be called as Wall Street’s Black Monday, the Dow went down 778 points or 7 percent.

Markets are plunging, Republican and Democrats are blaming each other and the crisis spreads into Europe.

Both the White House and the Capitol are reaching out for a resolution; they’re now heading into overtime.

What does this mean, especially in our special corner of the world?

Echoing their previous statements, NASSCOM announces that the recent US fall-out and the global financial crisis could crease their 2007/2008 growth projections.

Last July, NASSCOM forecast revenue growth between 21 percent and 24 percent to about $50 billion in the year to March 2009. However, with these present circumstances, the values can be tempered down.

The financial turmoil has impacted India’s BPO and IT/ITeS industries, leading many companies to broaden out their market targets and explore Europe, the Middle East as well as Asia for new business opportunities.

As it previously announced before, NASSCOM foresees this only for the short to mid-term period. Either the US recovers from its fiscal wounds or the Indian outsourcing industry will have to enact changes.

And changes are happening in India’s BPO and IT/ITeS industries as companies are seeking further growth and market access through mergers and acquisitions.

Turnovers are also occurring at the highest c-levels. Head of Wipro’s telecom, media and technology business, Sudip Nandy has gone and joined telecom software leader Aricent as its new CEO.

Satyam BPO CEO Venkatesh Roddam has resigned and the company’s newly appointed COO Vijay Rangineni will be in charge temporarily. Also, Satyam BPO’s CFO M Satyanarayana is reported due to retire.
EDS Asia Pacific Advisory Board chairman and MphasiS founder Jaithirth Rao has recently resigned from the company to pursue personal interests.

What would this mean for India’s industry as the leaders, who made it the powerhouse it is now, have moved on? Only time could really tell.

In the Philippines, the government as well as industry players and analysts are declaring the same thing: the country’s financial situation is strong. Its economy is relatively stable.

During a Senate hearing, financial and monetary institutions led by the Bangko Sentral ng Pilipinas (Central Bank of the Philippines), private banks and insurance companies insist that the Philippines’ macroeconomic fundamentals remained strong and resilient due to recent financial reforms.

In order to ensure more security, the Central Bank urged for the passage of urgent amendments in Philippine law regulating banks and financial institutions.

In spite of the possible detrimental effect that US financial crisis will have on the country’s booming BPO industry, the Business Processing Association of the Philippines (BPAP) assures that there will still be growth.

Similar to NASSCOM’s activities, the BPAP are vigilant with what’s happening stateside but are still optimistic about the local industry’s future as foreign investors from the US, Europe, India, Singapore and Australia continue to come and meet with them. This coming November the country will send a BPO delegation to the National Outsourcing Association (NOA) Conference in the United Kingdom where the Philippines was recognized as Off-shoring Destination of the Year 2007.

Let us stay tuned to further developments and see how India, the Philippines as well as their representative BPO/ITO associations would overcome the hurdles through their global marketing campaigns. Can their strategy of diversifying markets in outsourcing help them weather the present storm?

Outsourcing Solutions, Inc. – your outsourcing partner!

 

References:

  1. “IT growth may slow further: Nasscom.” 29 September 2008. India Times: Infotech. Accessed 30 September 2008. Link here
  2. “RP fundamentals strong.” 30 September 2008. Business World Online. Accessed 30 September 2008. Link here
  3. “Slowdown, M&As lead to frenetic people movement in tech sector.” 30 September 2008. The Economic Times. Accessed 30 September 2008. Link here
  4. Casaruyan, Mario and Chipongian, Lee. “RP financial system strong.” 30 September 2008. Manila Bulletin. Accessed 30 September 2008. Link here
  5. Lazaro, D’Jay. “Contact center sector may be threatened by US crisis.” 29 September 2008. GMA News. Accessed 30 September 2008. Link here
  6. Silva, Veronica. “Bid helps RP become top outsourcing destination.”  29 September 2008. GMA News. Accessed 30 September 2008. Link here

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