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Friday, Nov 22, 2002

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Poor infrastructure blunts outsourcing edge: Premji

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WHILE India has managed to get an edge over other countries in outsourcing, poor infrastructure could become a major deterrent, said Mr Azim H Premji, Chairman, Wipro Ltd, speaking at the "Global Outsourcing Forum 2002" organised by IDC.

He spoke of the conditions in the Mumbai airports and the roads, which form the first impressions for all foreign visitors. "What the visitors see before going into a software centre and after coming out of it is not good," he said. "It is not good PR."

While efforts are being made to step up infrastructure, it is "not enough", he said. "I believe we should take China as serious competition. Everything China does should be taken very, very seriously." At a national level, the country should provide reliable power, and bring down telecom costs, which are still double of that in the US.

At the same time, he said that outsourcing was no longer a "choice", but had become a "strategic necessity". "What happened to manufacturing 15 years back has now happened to services." Each country will begin to focus only on what it does best.

Together with globalisation, the economic downturn and the need for saving costs, is driving outsourcing, he said. A Nasscom-McKinsey study predicts two million jobs in the next six years. By 2008, the revenues from software is predicted to be $24 billion, approximately 3 per cent of India's GDP.

Mr Premji said that at a company level, partners need to have a good understanding of the customers' business, specially if the areas being outsourced are critical to the customers' business, have project management capabilities, must have ability to scale up, and offer security in terms of business continuity, and back up systems.

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