Outsourcing

1
Outsourcing

• The Cultural Transformation of India and Ireland

2
Outsourcing

• What cultural norms, values and
  historyimpact a contrasting perception?

3
Introduction

• Past, present, and future of outsourcing and how
  it has affected the respective cultures
• Eleven dimensions of cross-cultural business
• Application to each country
• Adjustment of management style, learning, and
  problem solving.
• Geert Hofstede Analysis and the GLOBE study

4
Introduction

• Two case studies focusing on outsourcing
• India
• ICICI OneSource
• Tata Consultancy Services
• Ireland
• Microsoft, Google, Oracle and Dell
• Amgen

5
India - Affective vs. Neutral

• Best described as a Neutral society in the way
  that its people display affection and feelings
• Majority of Indians prefer to keep their feelings
  controlled
• No displays of affection openly and in public
• Traditional way to show affection and caring from
  one partner to another is not by hugging, but
  doing things for each other

6
India - Affective vs. Neutral

• Significant Western influence can be observed in
  larger Indian cities
• People in south India are even more traditional
  that the Northern Indians
• Indian Supreme Court issued a warrant to arrest
  Richard Gere for kissing Bollywood star Shilpa
  Shetty at HIV/AIDS awareness event in New Delhi

7
Ireland - Affective vs. Neutral

• Irish people best described as happy, open, with
  many fun traditions
• Music and dancing are important factors of these
  traditions, they share and enjoy them in public
• Like to party and the pub is the center of the
  cultural, social and musical life

8
Ireland - Affective vs. Neutral

• More similitude to American culture than Indian
  culture
• Handshake is preferred greeting for women and men
  
• Men should refrain from being too physically
  demonstrative with women
• Maintaining minimum personal space is important
• Touching, patting or hugging other men in public
  are considered socially unacceptable

9
India - High Power vs. Low Power

• The Caste system
• Brahmins
• Kshatriyas (shot-triyas)
• Vaishnavas (vaysh-navas)
• Shudras
• The Class system
• Lower class
• Middle class
• Upper class

10
India - High Power vs. Low Power

• Women
• Prominent place in the history of Indian culture
• Birth and marriage rituals celebrated for males
• Sixty percent are illiterate
• Laws to protect women at the workplace
• Still face discrimination
• Geert Hofstede analysis
• Power distance score of 77 (high)
• Third highest masculinity score

11
Ireland - High Power vs. Low Power

• Caste system
• No caste system due to the belief in political,
  economic or social equality
• Class system
• Working class
• Middle class
• The new middle class

12
Ireland - High Power vs. Low Power

• Geert Hofstede analysis
• Power distance score of 30
• Women
• Laws in place to bring equality
• No bullying policy

13
India - Universal vs. Particular

• Best described as Particular
• Gender also plays an important role when applying
  the social norms
• Justice is not applied equally among all the
  members of the Indian society
• Public rules are not defined by the law, but by
  following the leaders and exemplary individuals
  for guidance
• Family is one of the most important factors

14
Ireland - Universal vs. Particular

• Best described as Particular
• Special attention at what is called the
  restoration of justice
• Northern Ireland implemented the Committee on the
  Administration of Justice
• Justice system does not apply equally to citizens
  and immigrants

15
Class Activity

• India Game

16
Game

• What country has one of the official top ten
  vacation destinations in the world?
• India (Kerala)

17
Game

• Which has an older civilization?
• India (3200BC)

18
Game

• What is Indias population
• 1 billion, 1.2 billion or 1.4 billion?
• 1.2 billion

19
Game

• Pronounce an Indian word Balasubramaniumneelacha
  ndran

20
Game

• How many kegs of Guinness are exported annually-
  3 million, 6 million or 12 million?
• 12 million

21
Game

• Which two entertainers are not of Irish descent?
• Colin Farrell
• Jennifer Connelly
• Pierce Brosnan
• U2
• Sean Connery
• Enya
• The Corrs
• Jennifer Connelly and Sean Connery

22
Game

• How many Bollywood movies are produced per year
  1000, 1500, 1800?
• 1,000

23
Game

• How many Indians go to the movies on a daily
  basis 5 million, 9 million, 14 million?
• 14 million

24
Game

• What is the cultural significance of St.Patrick?
• Conversion to Christianity in 432AD

25
India - High Context vs. Low Context Cultures

• High context culture
• Religion has had a big influence on the culture
• Titles hold a strong meaning

26
India - High Context vs. Low Context Cultures

• Subculture
• Arranged marriages
• Hindus offer prayers to their tools of worship
• Subtleties
• Greet by holding the palms together and saying
  Namaste.
• Remove shoes before entering a house
• Eat food with hand
• Unacceptable to point at someone with their
  finger.

27
Ireland - High Context vs. Low Context Cultures

• Low context culture
• Big cultural divide between people in rural and
  urban areas
• Religion plays an important role on the Irish
  psyche
• Titles are relevant but never directly related

28
Ireland - High Context vs. Low Context Cultures

• Subtleties
• Offensive to refer to the Irish as British
• Eire is the official name of the state
• Better to refer country as Ireland
• Subculture
• Pub culture
• Love traditions

29
India - Value Quality of Life vs. Value
Materialism

• Family and community values are very important
• Family values are strongly influenced by ones job
• BPO (business process outsourcing) industry is
  changing the way young Indians think

30
Ireland - Value Quality of Life vs. Value
Materialism

• Ireland leads the world for quality of life
• Group dynamic is more evident in casual contexts
  such as eating or drinking
• Family is at the root of Irish culture

31
India - Past, Present and Future

• Male children are highly desirable
• Shift in preference for female child
• Land of religious practice
• Hinduism, Jainism and Buddhism
• Caste system
• British Invasion
• Western Education
• Technology Shift
• Positive Negative Feelings

32
Ireland - Past, Present and Future

• Celtic settlements
• Trade, druidic religion
• St. Patrick arrived in 432 CE, most of the Gaelic
  Kings converted to Christianity as the primary
  religion
• New religion brought new attitudes towards change
• Education, status and social scene
• Ranks among the highest educational participation
  rates in the world at 81

33
Ireland - Past, Present and Future

• More than 65 of students go on to complete
  higher education programs
• Over the past 50 years, Ireland has had the
  highest economic growth rate in the E.U.
• Study abroad programs
• Global outlook has led to movies, sports and
  music

34
Web Site / Field Trip

• ucam-productions.com

35
Case Studies
36
Reverse Outsourcing from India to Ireland

• Introduction
• Background of Outsourcing
• Y2K bug
• Problems with Outsourcing
• Staff attrition
• Increasing costs
• Customers unhappy

37
Reverse Outsourcing from India to Ireland

• Hindustan Computers Limited Technologies
• Fifth largest IT services company
• Has the largest BPO operation in Ireland
• Invested 16 million pounds in three different
  expansions over last seven years

Pic
38
Reverse Outsourcing from India to Ireland

• ICICI OneSource
• Ranks fifth among BPO firms in terms of export
  revenue
• Invested five million pounds
• Facing opposition from the locals
• Hiring from the local population
• The model used to set up the call center is
  identical to the ones set up in India

39
Reverse Outsourcing from India to Ireland

• Polaris Software Labs Limited
• Leading providers of products and solution
  offerings in the banking, financial services and
  Insurance domain.
• Hires only graduates from the top universities
• Develops its centers in three phases
• Provides independent quality assurance
• Provide software development
• Provide round-the-clock customer service

40
Reverse Outsourcing from India to Ireland

• Tech Mahindra
• Sixth largest software exporter in India
• Joint venture between Mahindra Mahindra Limited
  and British Telecommunication
• Created a center of excellence for business
  services
• Created 200 jobs thus generating 21 million
  pounds over the next three years

41
Reverse Outsourcing from India to Ireland

• Tata Consultancy Services
• Worlds largest and oldest provider of IT
  consulting services and BPO centers
• Chose Ireland because of its high standards of
  business excellence
• Presented with the UK trade and Investment
  special recognition award

42
Why is Ireland a Preferred Country for
Outsourcing?

• The battle for outsourcing
• One of the most popular countries for outsourcing
  throughout the 90's
• Low corporate income tax rate and its flexible,
  educated, and growing young workforce
• In the late 90s, other countries with much lower
  wages, such as India, China and Eastern Europe
  became a more lucrative option for outsourcing.
• Countries that outsourced to India experienced
  problems because the quality of the job was not
  what they were expecting
• Over the past decade, Ireland began to reclaim
  those lost jobs and has become one of the hottest
  European economies.

43
Why is Ireland a Preferred Country for
Outsourcing?

• Offers more than just off-loading non-core
  activities or functions such as call centers
• Physical location - closer to North America than
  India
• English speaking country
• Closer to the culture of those countries with a
  significant presence in outsourcing, specifically
  Western Europe and the U.S.
• Began to apply consulting expertise to increase
  revenues and reduce operation costs for foreign
  companies

44
Why is Ireland a Preferred Country for
Outsourcing?

• Accenture Ireland offers four levels of
  outsourcing
• Technology infrastructure.
• This is the basic layer. Companies outsource
  their Information Technologies activities to
  other countries
• Business application.
• Management and maintenance of applications is
  hosted in a different country.

45
Why is Ireland a Preferred Country for
Outsourcing?

• Accenture Ireland offers four levels of
  outsourcing
• Business processes.
• Technical and infrastructure operation of the
  organization are outsourced, but also the
  business processes.
• Business transformation
• Encompasses all of the above layers.

46
Why is Ireland a Preferred Country for
Outsourcing?

• Represents a good outsourcing opportunity for
  transnational companies with branches in other
  European countries
• Mid-size European companies in the same industry
  are outsourcing similar functions.
• The host company supports these services for
  organizations within the same industry on a
  completely secure and confidential basis.
• Better acceptance when jobs are being outsourced
  to the European Nations instead of India

47
Why is Ireland a Preferred Country for
Outsourcing?

• Irelands strength in outsourcing has bypassed
  the limits of the European borders
• Microsoft
• Planning to spend 500 million to build new
  European data-processing center
• The third massive data-storage and
  search-processing warehouse
• First 'mega data centre' deployment outside the
  U.S.
• Employs more than 1,200 people at three campuses
  in Ireland, its major European base
• Oracle
• Invested 80 millions in a global Research and
  Development (RD) center.
• Hired 250 employees for this facility
• Google
• Planning to hire more than 500 employees
• Bring a total of 1,300 Google employees into
  Ireland.
• Dublin is headquarters for all of Google's
  business in the Europe, Middle East and Africa
  (EMEA) region
• Biggest Google operation outside the U.S.

48
Why is Ireland a Preferred Country for
Outsourcing?

• Accelerated expansion has had its pitfalls
• Dell had a difficult experience finding enough
  employees to support its most recent expansion in
  the country
• Competing with other first world class companies
  like Microsoft, Apple, and Pepsi Co.
• Dell found qualified talent in other European
  countries such as Spain, France, and the
  Netherlands

49
Why Did Amgen Choose Irelandto Expand Its
Operations?

• In 2005, Amgen announced plans to build a 1.3
  billion manufacturing plant in Cork, Ireland
• Country selection started with 20 possible
  countries
• Selection rapidly narrowed to three countries
  Ireland, Switzerland and Singapore
• Tax benefits
• Reduced its top corporate income tax rate in 2003
  from 16 percent to 12.5, placing it well below
  European Union average of 30 percent and U.S.
  rate of 35 percent.

50
Why Did Amgen Choose Irelandto Expand Its
Operations?

• Top U.S. pharmaceuticals firms, such as Pfizer,
  Eli Lilly and Boston Scientific already have an
  established presence in Cork
• Qualified workforce to work in different levels
  of an organization
• Large pool of engineering resources and large
  subcontracting networks that allows for timely
  completion of Amgen manufacturing plans
• English speaking country - offers a great
  opportunity for optimal communication

51
Ireland - Conclusion

• Things to keep in mind with outsourcing
• As a citizen of that nation
• Family/tradition is key
• Equality/less reverence for titles
• As a company
• Expertise
• Tax benefits
• Less tolerance

52
India - Conclusion

• Things to keep in mind with outsourcing
• As a citizen of that nation
• Family/tradition is key
• Titles are important
• As a company
• Cheaper labor
• Employees havemore tolerance
• Respect culture, religionand traditions