Nearshore Americas

NASSCOM: Let’s Call it Something Else


BANGALORE – After taking a long hard look at the some of the negative connotations around the terminology, “offshoring” and “outsourcing,” the Indian trade lobby group is turning away its use. This is particularly in light of some reaction that has come from mature markets such as the U.S.

India has been one of the top countries for outsourcing in the last two decades. And its export IT market has produced hugely successful software development firms in the industry like Infosys, Wipro and TCS.

Som Mittal, President of NASSCOM (National Association of Software and Services Companies) said in a statement, “I think we have to remove ‘offshoring’ from our vocabulary,” reports the Economic Times.

As the Indian outsourcing industry prepares itself for recuperating from losses incurred during the recent economic downturn, the IT lobby group is getting ready to put up a new front that will shed some positive light on the capacity of Indian firms to provide cost effective business solutions for U.S. companies.

However, the move comes at a sensitive stage in the American economy, when unemployment is high and President Obama has criticized outsourcing policies in a State of the Union speech.

An alternative strategy has been put forward by the outsourcing industry to tap the domestic market. According to one study reported by the Economic Times, the domestic engineering and Research and Development market is speculated to cap $40-$45 billion in the year 2020.

Nonetheless, Mittal continued to say that the use of the term, “outsourcing” has clearly “hurt” the Indian software industry market abroad. Terms like outsourcing go together with the sentiment of taking away American jobs and that has build resentment in several Western countries.

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Mittal explained outsourcing as a business, just as Nokia is developing its parts in India.

Krishna Mikkilineni, President of Honeywell Technologies, reiterated the existing concern by saying that even the term ‘services’ has a negative connotation and should be left out with offshoring and outsourcing. He added, “This is engineering (not need to add services).”

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

1 comment

  • Semantica, semantics. Agree that "outsourcing" can be interpreted in many ways, some of them harmful. For example, in Mexico the word "outsourcing" has very bad connotations: for some folks it means a bodyshopping model that tries to avoid paying some social taxes, i.e. a model that is not ethical and sometimes even illegal. So, sometimes we use the Spanish word "terciarizacion". So – yes, "outsourcing" should be replaced by a new term. However, Mr Mikkilineni went to far saying that the word "services" shouldn't be used becasue what we are doing is "engineering". Well – our industry is about providing IT services, and there is no way around that. It just happens that we employ computer engineers and such. In many places, doing "engineering" means that you need to be licensed, for example when you are a civil engineer. So, no, "engineering" and "services" (especially IT services) are not synonyms, and I do not see any bad connotations in the word "services"